According to a new Wells Fargo survey, Americans are willing to do what it takes to make their homeownership goals a reality — such as taking on a side job, cutting expenses or considering a less-expensive location.
The Wells Fargo 2019 “How America Views Homeownership” survey was conducted by The Harris Poll April 17–29, 2019, among 1,004 U.S. adults 21 and older. Key findings include:
- Nearly half of Americans who are saving to buy or renovate a home (49%) have done work outside their primary job to supplement their income to pay for it, such as selling items online (37%), starting a small side business (21%), driving for a rideshare company (18%) and dog sitting/walking (16%).
- Nearly eight in 10 non-homeowners (78%) say they would be willing to accept their second choice of a city or town in order to afford their own home.
- Nearly three quarters of non-homeowners (74%) say they would be willing to buy a smaller home with fewer amenities.
- Over seven in 10 Americans (72%) say they would give up something to save for a down payment, including dining out (44%), going to events (43%) and vacations (38%).
- Millennials who don’t own homes are even more willing to make trade-offs, such as considering a second choice of city (85%), and millennials as a whole say they are more willing to take steps — such as side jobs (70%) or cutting expenses (83%) — in order to save.
“Homeownership is part of the fabric of American life, defining communities and providing a base for families to live out their dreams,” said Michael DeVito, head of Wells Fargo Home Lending. “As today’s consumers set out to achieve their homeownership goals, they are making smart financial decisions that position them — and the communities they call home — for long-term financial success.”
For Americans as a whole, homeownership still the goal
Even in the wake of the Great Recession and current affordability concerns, Americans see homeownership as a clear metaphor for adulthood and achieving the American Dream. For most Americans (70%), owning a home is seen as a sign that someone is a “successful adult,” on par with having a career (73%). In fact, homeownership is much more widely equated with being a successful adult (more than twice as much) than having children (34%) or getting married (32%).
Nearly nine in 10 adults (89%) say the benefits of homeownership outweigh any drawbacks. Although most current homeowners (69%) had to make hard sacrifices to afford their home, nearly all say buying their home was worth all the sacrifice to save for it (90%). If they had to do it over again, they say they still would choose to buy their home rather than rent (93%). In fact, nearly all homeowners (95%) say that, in the long run, owning a home provides more “bang for your buck” than renting.
Millennials share this commitment: 95% of millennial homeowners say it was worth the sacrifice, and 86% of millennials as a whole say the benefits of homeownership outweigh the drawbacks.
“The majority of Americans see homeownership as an investment in their future and as a key piece in achieving goals like financial health and security,” said DeVito. “It is a meaningful step that brings benefits not just to individual families, but also to the neighborhoods and communities they call home. That’s why Wells Fargo is focused on supporting homeownership and homebuyer education, including our recently announced $1 billion commitment to address housing affordability.”
The down payment is the thing
The No. 1 hurdle to buying for Americans is saving for the down payment. More than one in four (27%) say the down payment is the biggest barrier, and it’s even more pronounced for millennials, with 38% calling out the down payment as the biggest challenge to buying a home.
This attitude has persisted since the first Wells Fargo “How America Views Homeownership” survey was conducted in 2014, when 24% of respondents said saving enough for a down payment was the biggest barrier to buying. That’s despite the fact that some mortgage programs allow qualified buyers to put down as little as 3%.
Americans also have misperceptions about what it takes to increase their opportunity to get financing for a home, citing “perfect” credit (71%), being debt-free (65%), “having a lot of money in the bank” (59%) and having no student debt (38%).
In fact, 31% of homeowners say they never thought they would be able to purchase their own home, and that number was even higher (54%) for millennial homeowners.
“Financial education represents a tremendous opportunity when it comes to helping more Americans achieve homeownership, and there are a lot of resources available to address the misperceptions that persist about homebuying,” said DeVito. “It is important to save and tend to your credit score, but you don’t need perfect credit, and there are low down payment loan programs designed to give first-time buyers a clearer path to owning a home.”