Most renters intend to purchase a home someday, but according to research [1] by Fannie Mae, the down payment could keep them from that dream.
According to the survey, nearly half of respondents see the down payment as the biggest obstacle to getting a mortgage. Though 73 percent of current or past homeowners surveyed said they could have afforded a home without their families help, one-fifth reported receiving financial assistance from family when they bought their first home. Additionally, they also tend to be the group that has the highest homeownership rates. Among millennials, almost two in three reported their families helping them with at least half of the upfront costs of homeownership.
“Hispanics and non college graduates, whose homeownership rates tend to be lower than the general population’s, are less likely to say they received financial assistance when buying a home, even when controlling for other factors,” the report stated.
The two primary reasons for renting now were financially preparing to own a home (28 percent) and the fact that renting is more affordable (25 percent). Following affording the down payment (45 percent), respondents believed the biggest obstacles for getting a mortgage included an insufficient credit score or credit history (43 percent), too much existing debt (18 percent), and the process being too complicated (16 percent).
Though minorities were hopeful they would be able to provide financial assistance to family in the future, they were no more likely to have reported providing financial support in the past.
In the general population, 38 percent expect to give aid in the future, and 16 percent already have assisted. For Caucasian: 31 percent and 18 percent, Hispanic: 51 percent and 16 percent, and African-American: 53 percent and 12 percent.