Lack of knowledge and misinformation may be discouraging
Americans from buying a home according to a recent survey sponsored by Wells
Fargo &Company. The survey,
conducted in June by Ipsos Public Affairs, found that many prospective
homebuyers do not take the plunge because of uncertainty about their ability to
qualify for a mortgage or about navigating the homebuying process.
The
survey, "How America Views Homeownership,"
found that many Americans say their financial houses are in order. Eighty percent said they know how to handle
their personal financial affairs and 82 percent claim they generally don't
spend beyond their means. Only 27
percent said that they tend to spend their money and not think twice about it. Sixty-three percent, including more than half
of the millennials (ages 18 to 34) in the survey, said they have a "rainy day
fund." These factors, the bank says,
all improve on the ability to buy a home.
"Although
the homebuying process has changed in many ways in recent years, our survey
found Americans still view homeownership as an achievement to be proud of and
many believe that now is a good time to buy a home," said Franklin Codel, head
of Wells Fargo Home Mortgage Production.
When it comes to buying a house 74
percent of respondents surveyors that they "know and understand" the financial
process involved, but other responses indicated that this may not really be the
case. For example, Wells Fargo said that, while
68 percent of Americans feel it is now a good time to buy, almost a third - 30 percent
- of survey respondents think that only
individuals with high incomes can obtain a mortgage and 64 percent believe that
someone must have a "very good" credit score to buy a home.
The survey found that while 64
percent claimed to be knowledgeable about downpayment requirements, 44 percent
think that a minimum of 20 percent is required and a lack of these funds was
cited by respondents as one of the biggest barriers to owning, especially for
millennial respondents, age 18 to 34.
Forty-four percent also admitted to knowing little or nothing about
closing costs for a home purchase and about half said they feel they lack access
to homes that meet their needs financially.
All of this, the bank says, points
to the need for more homebuyer education.
"Our survey also suggests we have an opportunity as lenders, nonprofit
agencies and real estate agents to better inform Americans about credit
ratings, mortgage costs and housing affordability," Codel says. "This would help demystify the homebuying
experience for many consumers."
"It is important for prospective
homebuyers to feel empowered to ask lenders and real estate agents questions
about available options, such as down payment assistance or FHA loan programs
or VA loans for veterans," he continued. "Ninety-five percent of survey respondents
said they want to own a home if they don't already. Informing prospective
homebuyers about their options is the first step toward helping them realize
their goals."
The Well Fargo/Ipsos Public Affairs
poll was conducted from June 3-16, 2014 with 2,017 adults. They were interviewed on-line and the data were weighted to ensure that the
sample's age/sex composition reflects that of the actual U.S. population
according to Census information.