ST. LOUIS–A new survey has found 31% of non-homeowners say they’re knowledgeable about the home-buying process, but 62% wrongly think it’s required to put down 20% on a home, and 66% mistakenly believe buyers pay their agent’s commission fees.
The survey was conducted by Real Estate Witch and is being released at a time “homeownership has become somewhat of a national obsession, with more than half of Americans (53%) looking at Zillow listings at least once a week and 29% looking at least once a day during the home-search process,” the company said.
Perception of ‘Falling Behind’
In releasing the findings, Real Estate Witch said Americans may feel “behind” in life if they don’t own a home, but a majority “overestimate the success of their peers.”
The average age of a first-time home buyer is actually 36, but 73% of Americans think it’s much younger, according to a survey of 1,000 Americans conducted by RealEstate Witch.
Americans may be obsessed with homeownership, but they actually know very little about the home-buying process. In fact, 83% of homeowners say they were surprised by at least some aspect of buying a home.
The Findings & Misunderstandings
Among some of the findings in the survey, and opportunities for credit unions to offer education:
- 83% of homeowners were surprised by parts of the home-buying process.
- The average age of a first-time home buyer is 36, but 73% of Americans think it’s much younger.
- 73% of Americans don’t think homes are affordable right now, yet 60% underestimate the median home price. Just 14% know the median price ranges between $400,000 and $499,999.
- Many homeowners misjudged how much it would cost to purchase a home, and 34% paid more for their home than they initially planned.
- In addition to their mortgage, homeowners spend about $13,150 annually on home-related expenses — such as utilities, maintenance, and improvements — but 48% of Americans believe annual homeownership expenses are less than that amount.
- Mortgage lenders recommend putting down 20% on a home, but 62% of Americans believe it is a requirement.
- 21% say home buyers actually need to put down more than 20%.
- 23% of non-homeowners think saving for a down payment will be the most challenging part of buying a home, but only 8% of homeowners say it actually is.
- Real estate agents generally communicate with the seller, but 2 in 3 non-homeowners (65%) mistakenly believe it’s the buyer’s responsibility.
- The seller usually pays agent commission, but 62% of Americans think buyers pay their agent’s commission.
- Just 12% of Americans know the current rate for a 30-year mortgage hovers between 6% and 7%. Forty-three-percent of Americans think the interest rate is higher than 7%, with 1 in 4 saying it’s more than 10%. The last time rates reached 10% was more than 30 years ago in 1990.
- 43% of non-homeowners think they are knowledgeable about the mortgage process, but nearly two-thirds (64%) wrongly assume buyers should find the home they want to purchase before getting pre-approved.
- About one-third of Americans (32%) say a credit score of at least 700 is necessary to purchase a home, but in reality, buyers can qualify for a conventional loan with a score of 620.
The full report can be found here.
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