According to How America Views Homeownership, a study conducted by Ipsos Public Affairs for Wells Fargo, over two-thirds of Americans feel that the time is now to buy a home. Although the study shows that Americans view owning a house as something to be proud of, it also suggests that there are a lot of people who don’t really understand the current mortgage environment. Post-crisis lending standards have risen significantly, but the study states that many qualified potential buyers are scared off by what they perceive as much tighter mortgage rules. However it seems as though large financial institutions have noticed this and are trying to do something about it. Franklin Codel, head of Wells Fargo Mortgage Production, adds “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”.
Many Americans are also in a much sounder financial position than in recent history, driving up demand for real estate. Over 80 percent of survey respondents claim to understand how to manage their finances, while over 60 percent have a rainy day fund – including more than half of millennial respondents ages 18-34. 95 percent said they want to own a home if the don’t already, so it looks as if the real estate market will continue to strengthen.
While three quarters of respondents “know and understand” the financial process of purchasing a home, the other suggest they may not truly understand all their options and costs that are involved – 44 percent knew nothing about closing costs. Most stated that the down payment is the greatest barrier to home buying, however almost half were under the impression that a 20 percent down payment is necessary. Codel states, “It’s important for prospective homebuyers … 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”. So, if you’re interested in the Miami market, or just have general questions about purchasing a home, please reach out and contact a RE/MAX agent today!