Unison Home Ownership Investors, the leading provider of home ownership investments, today announced findings from its survey, The Value of Owning a Home, which collected responses from 1,000 potential U.S. home buyers on the biggest barriers to home ownership and what they are willing to sacrifice to making home ownership possible.
Conducted by Atomik Research, the findings dive into gender and generational disparities in entering the housing market, including what buyers are happily willing to forgo to increase purchasing power, the challenges of saving for a down payment, confidence in job security and the future of home prices.
Making Compromises to Buy a Home
Purchasing a home is a large investment, but when it comes to saving for a down payment, most buyers are ill-prepared and willing to make significant compromises to achieve their dream home.
22 percent of respondents would give up the right to vote in exchange for a 10 percent down payment they do not need to return.
Millennials (26 percent) are more likely than Gen X (20 percent) and Baby Boomers (7 percent) to give up their right to vote.
In addition, 44 percent agree that they would give up their dream car, and 38 percent would give up vacationing for the next five years.
Men (24 percent) are more likely than women (21 percent) to give up their right to vote, and men (14 percent) are more likely than women (9 percent) to give up their driver’s license.
58 percent of those surveyed would be more likely to date or marry someone who already owned a home at the time their relationship began.
Consistent across generations and genders, Millennials (58 percent), Gen X (59 percent) and Baby Boomers (56 percent), as well as men (60 percent) and women (58 percent) admit preference towards engaging in a relationship with a current home owner.
The Disillusionment Gap: Challenges of Saving for a Down Payment
While many home buyers lack savings for a down payment, a majority (67 percent) believe they can buy a home in the next one to two years with under $7,000 saved. In addition, many do not take into account debt, like student loans, car payments and credit card bills which impede home ownership.
84 percent of respondents think it will take under four years to save for a down payment.
Less women (30 percent) than men (51 percent) appear to have more than $7,000 saved.
Generally, Baby Boomers who have spent more time in the workforce have more saved. Only 27 percent of Millennials have over $7,000 saved, compared to Gen X (37 percent) and Baby Boomers (54 percent). Of those, only 9 percent of Millennials have over $15,000 saved, Gen X (13 percent) and Baby Boomers (36 percent).
Respondents also cited a low credit score (37 percent), a lack of overall savings (33 percent), the cost of a monthly payment (32 percent), high rental costs (26 percent) and a lack of homes to choose from (25 percent) were all factors that contribute to why people are not buying homes.
As many as 68 percent of respondents agree that they could benefit from first-time home buyer education through a professional. Only 41 percent of Baby Boomers felt the need for further education, compared to Millennials (73 percent) and Gen X (72 percent).
Overcoming the Financial Barrier
Although there are economic and financial challenges across age and demographic profiles, people are open to alternative forms of financing to address the needs for funds for a down payment.
75 percent of respondents are confident and secure about their job, yet 73 percent also think home prices will increase, and 65 percent believe mortgage rates will increase in the next year.
The survey found that 26 percent of people would consider crowdfunding a down payment, and 29 percent would use an equity investment or home ownership investment.
“We know that the down payment and the overall home affordability are major challenges for prospective home buyers – especially for Millennials and first-time buyers who are more likely to extend themselves beyond their original budget,” said Michael Micheletti, director of corporate communications, Unison. “Unison is fundamentally changing the way people buy and own a home in the United States. Everything we do starts with our customers, and the Unison HomeBuyer program is making home ownership achievable again.”
Unison commissioned Atomik Research to run an online survey of 1,003 potential U.S. home buyers who said they are either somewhat or very likely to purchase a home within the next two years. In accordance with Market Research Society guidelines and regulations, the margin of error fell within +/- 2 percentage points, with a confidence interval of 95 percent. The fieldwork took place between April 5 and 9, 2018. Atomik Research is an independent creative market research agency that employs MRA-certified researchers and abides by MRA code.