Despite a growing concern about housing affordability, majority of American still believe homeownership is a good investment. This is the highest number since 2007, according to the National Association of Realtors (NAR). Meanwhile, the lack of affordable housing and raising down payment remain big barriers to achieving the American dream.
The annual Realtor group's 2017 National Housing Pulse Survey found 84 percent of Americans believe buying a home is a good financial decision. For eight out of 10, the most important financial reason to own a home is building equity. Paying off a mortgage and owning a home by the time you retire was the next most important financial reason for buying a home, followed by ownership being a good investment opportunity to build long-term wealth and increase net worth. Over 50 percent of respondents strongly agree that homeownership helps build safe and secure neighborhoods and provides a stable environment for children and family members.
"The survey shows despite rising home prices and concerns about housing affordability, a majority of Americans value homeownership," says Denise Welsh, president of the Silicon Valley Association of Realtors. "Building equity, the investment opportunity, and providing a safe and stable home for their family are strong reasons for homeownership."
The survey, which measures consumers' attitudes and concerns about housing issues in 25 largest metropolitan statistical areas, found six in 10 are concerned about affordability and the rising cost of buying a home or renting in their area. Housing affordability was ranked fourth in the top-five issues Americans face in their area behind the lack of affordable health care; low wages and debt making it hard to save; and heroin and opioid drug abuse, and ahead of job layoffs and employment.
Nationally, 44 percent of respondents said the lack of available affordable housing was a very big or fairly big problem. Four in 10 respondents said a down payment of 15 percent or more is necessary, while 70 percent think a reasonable down payment should be 10 percent or less, according to the survey.
"For many first-time homebuyers, the biggest barrier to homeownership is the down payment. There are many misperceptions about down payment requirements that prevent would-be homebuyers from even thinking about purchasing a home," says Welsh.
According to realtor.com, NAR's online listing website, there are more than 2,200 low down payment options for creditworthy borrowers who have manageable levels of debt. The website Downpayment Resource offers information on financing programs for homebuyers. Fannie Mae's Homebuyer Funds Finder can help buyers learn more about financing options that are available in your community.
Many state agencies and cities offer financial-assistance programs for homebuyers. Welsh suggests checking financing options listed by state on the Department of Housing and Urban Development website.
The California Housing Finance Agency has been helping state residents obtain affordable housing since 1975. The Housing Trust of Silicon Valley provides loans to low and moderate income homebuyers in Silicon Valley in the form of low-interest second mortgages and down payment assistance. Some companies allow employees to borrow against their 401(k) or pension funds, while others offer direct assistance as a company benefit.
Welsh tells aspiring homebuyers not to be discouraged. "Check with your Realtor and lender for programs available in your county or city. Since programs change frequently, they would be able to inform you of the latest options or guide you to the best possible resource," says Welsh
The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.
The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.
Variations of this article have appeared in local area newspapers.
For further information, please email or call the SILVAR office at (408) 200-0100.