One of the pillars of the so-called American dream is owning a home. Today, many Americans still seem to be holding onto this idea.
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A recent KB Home survey asked Americans, from Gen Z to boomers, about their knowledge of the homebuying process, which factors drive their homebuying decisions, and the overall importance of homeownership today.
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Americans Still Want To Buy Homes, But They’re Nervous
The survey revealed that even in 2024, Americans still want to buy homes, and most think about it often. Here are some key highlights:
- Approximately 4-in-5 Americans (83%) believe that homeownership is an essential life milestone, and 40% think about buying a home at least once a week — especially Gen Zers (62%) and millennials (55%).
- U.S. adults cite long-term financial benefits (44%), privacy (49%), and wanting a place to make memories (33%) as the top three most important reasons to own a home.
- About 6-in-10 Americans (58%) would spend less on nonessential purchases to save for a down payment for a home, and more than 2-in-5 (45%) would consider taking on a gig job or side hustle.
- More than half of Americans (51%) associate homebuying with a feeling of excitement. Many also associate homebuying with confidence (30%), motivation (32%), and a sense of pride (43%).
At the same time, while there’s an overwhelmingly positive sentiment associated with owning a home, many Americans are also feeling nervous. Here’s what the survey indicated:
- Around 1-in-4 Americans associate homebuying with feeling nervous or stressed.
- More than half of Americans (56%) feel that they’re in a worse position to buy a home than their predecessors.
- A full 85% of Americans are at least somewhat nervous about purchasing a “money pit,” or a home that drains their finances.
- Nearly 3-in-4 Americans are at least somewhat nervous about being able to find the right home, afford a home, or find the right partner to buy a home together.
3 Real Estate Falsehoods That Many People Believe in 2024
On top of all that, here are three myths about homebuying that you may be falling for in 2024, according to KB Home and Realtor.com:
- Mortgage rates are at an all-time high: As of Aug. 15, 2024, the Federal Reserve Bank of St. Louis reported that the current 30-year fixed-rate mortgage average in the U.S. is 6.49%. This is down from a recent high of almost 8% in November 2023. Many believe that mortgage rates have reached an all-time high. But, the reality is that the current mortgage rate is a far cry from the record high in 1981, when rates peaked at about 18.6%.
- A minimum 20% down payment is required to get a mortgage: It’s possible to qualify for a mortgage without a minimum 20% down payment. For example, FHA loans (first-time homebuyer loans), which are insured by the Federal Housing Administration, only require a 3.5% down payment. There are also mortgages for military veterans and farmers who may qualify for low mortgage rates. Alternatively, you can pay for PMI (private mortgage insurance), which is an additional monthly charge on top of your mortgage payment that allows you to put down a payment of less than 20%. Once you’ve paid off 20% of your mortgage, you can ask the lender to drop your PMI payment. PMI ultimately protects the lender in the event you default on your mortgage.
- You need excellent credit to qualify for a mortgage: A common misnomer is that you need “stellar credit” to qualify for a mortgage. However, it’s possible to qualify for some mortgages, like an FHA loan, with a credit score as low as 500.
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This article originally appeared on GOBankingRates.com: 3 Myths About Homebuying That You May Be Falling For in 2024
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