Recently, NeighborWorks America released highlights from its sixth annual national housing survey. Aspirations of homeownership remain strong, with 92 percent of adults saying homeownership is an important part of the American dream. However, a steady and significant percentage of consumers with student loans worry their debt will affect their ability to achieve homeownership in the future. In addition, there is widespread belief that the mortgage process is complicated, and relatively few consumers know where to find knowledgeable advice about how to qualify for a mortgage and buy a home.
These factors are just a few of the forces keeping the housing market from achieving a more robust, broad-based recovery.
The NeighborWorks America survey asked questions that revealed the extent to which misinformation about credit and required down payments is affecting homebuying aspirations, and how much the burden of student loan debt is delaying homeownership. It found that in 2018, 36 percent of adults knew someone who delayed the purchase of a home because of student loan debt. Among millennials (adults ages 18-34), 59 percent knew someone who delayed buying a home because of student loan debt.
Thus, it is no surprise that 85 percent of adults with student loan debt and 87 percent of millennials reported worrying about their debt some, most or all of the time.
Meanwhile, the perceived complexity of the homebuying process may be dampening enthusiasm for homeownership, despite historically low mortgage rates. Approximately 73 percent of adults said they strongly or somewhat agree "the homebuying process is complicated."
Nevertheless, homeownership remains a goal for most people and is recognized as a key source of financial stability. The survey found 80 percent of all adults and 68 percent of millennials believe owning a home increases financial stability. That belief is behind NeighborWorks America's support of a range of programs that help consumers understand the homebuying process, develop reasonable budgets and prepare for what is usually the biggest purchase consumers make in their lifetimes.
Overall, affordability is perhaps the most troubling question mark for the future. Only 44 percent of adults surveyed believe that where they live is affordable for first-time homebuyers. Likewise, 62 percent of people believe rent prices are too high for the average person to save to buy a home in their area. This pessimism is slightly stronger among nonwhites, with 65 percent of people of color saying rent prices are too high
For NeighborWorks organizations and other nonprofits that offer homeownership services, these data illustrate an opportunity to expand education and outreach. By expanding homebuyer education, student loan debt counseling and marketing of down payment assistance, nonprofits can clear up confusion and increase use of tools that improve access to affordable options.
*In 2017 and 2018, an online survey was conducted of 1,000 U.S. adults. Prior surveys were conducted using a random-digit-dialing telephone methodology. All surveys are estimated to have a margin of error +/- 3.1 percent with a 95 percent confidence interval.