One of the reasons many potential homeowners are holding back from purchasing their first-home is the fact they cannot save for their down payment. The idea of putting twenty-percent down on a house is not only daunting but it feels impossible.
Desperate buyers have expressed concern over their ability to buy a house and have even talked about what they would give up to be able to achieve this.
In a recent survey, buyers said they would go to extremes to get a down payment. Many said they were giving up eating out, general entertainment costs, and even vacations for years until they were able to save for a down payment. Almost forty-five percent of the people surveyed said they would give up on owning their dream car to get a down payment.
Taking this even farther, even twenty-two percent of buyers said they would be willing to exchange their right to vote for a ten percent down payment. Buyers are clamoring to get the money for a down payment and are willing to go to extremes to do it.
When talking with buyers who are feeling desperate for a down payment, a common factor is having a low savings account. Over forty percent of those looking to buy a house had less than three-thousand dollars in their savings.
Not only has it been difficult for buyers to put away money for a down payment but many see poor credit scores as well. A result from living paycheck to paycheck means that many people have racked up high credit card bills. Paired with the fact many people are paying exuberant amounts in rent each month they are digging themselves a hole that they cannot get out of.
Debt, in general, is a huge factor when struggling for a down payment. Many have student loans that they will be paying back for years. Others have invested in a new car that is taking a good portion of their money. Some even face high healthcare costs and debt that is stopping them from saving.
The current housing market does not help matters. Buyers have much higher debt as they enter the housing market. Then they are seeing homes that are priced too high because it is a seller’s market. There are few new homes being built and homes that were once considered starter homes are still occupied by previous owners that refuse to sell.
Potential buyers are stuck between high rent prices with an inability to save and high mortgage prices on a limited amount of houses that are for sale. Many potential buyers are not concerned about their own paychecks, however. There are many that believe they are going to see their income continue to rise and feel that the economy is not in bad shape.
Many buyers are trading luxury for a down payment. Even simple things like eating out are holding some people back from saving as much as they would like. Potential home buyers are working hard to come up with a sizable down payment to avoid taking out too large of a loan that they cannot pay back later.