[ad_1]
American homeowners are struggling to pay for their homes and, as a result, they would like to save more money before signing on the dotted line.
This is evident from a recent Freedom Debt Relief Relief survey of 1,028 US homeowners with at least $ 10,000 in unsecured debt. (Unsecured debt includes credit card debt and medical bills.)
More than half (69%) of those surveyed said they should have saved more money for their down payment. On top of that, 52% of homeowners say their monthly mortgage payment is too high, 29% say that owning a home stresses them, 26% feel that it's a burden to own a home and a bit over 40% say they do not know all their mortgage options.
Although they feel stressed and regret their approach to buying a home, the majority of homeowners (59%) still consider that property represents a large part of the American dream.
In a recent survey on homeownership, Bankrate achieved similar results. While 79% of Americans view owning a home as "an essential feature of realizing their American dream," 44% of homeowners said they regret buying their home.
Homeownership does not seem to become easier or more affordable for potential buyers. From 2017 to 2018, the median housing value increased by 6%. While this is good news for homeowners, it's not so good for homebuyers because down payments and monthly mortgage costs will inevitably be higher, revealed the co-investment company in the field of Unison House in its 2019 report on housing affordability.
The Unison report also revealed that it now takes more than 25 years to save up to 20% down on a median income. in major US cities, such as New York, Los Angeles and San Diego. Nationally, it takes about 14 years to save up to 20% down payment if you earn a median income. As a result, potential owners are waiting to buy.
"In the current state of affairs, an entire generation of Americans could be about to retire before they can own a home safely or be forced to take more risks than they can." They can not reasonably afford to realize their dream of homeownership, "said Thomas Sponholtz, managing director of Unison. says in the report. "It's a societal and economic problem that affects all levels of income."
In the United States, the waiting game is especially true for young people with a student loan. In fact, 48% of undergraduate students with student debt are considering deferring the purchase of a home, according to a recent Clever real estate survey. On average, they expect to postpone home ownership for about seven years.
In parallel with the rise in housing prices, the income of American workers has remained about the same. Over the past 40 years, Americans' wages may have increased, but their spending power has barely changed, reports the Pew Research Center. Add to that the increase in tuition costs at the college level (and at the badociated interest rates). It is therefore not surprising that graduates find it extremely difficult to pay off a debt and buy a house.
How much should you save for a down payment?
It is important to put in place a solid strategy to save towards a down payment in order to avoid finding yourself as the remaining 69%.
First, determine how much house you can afford. Since 1981, the government has stated that people should not spend more than 30% of their gross monthly income on housing. Your monthly mortgage payments will be determined by the cost of the home and the amount of your down payment. The lower the down payment, the higher your mortgage and interest rates.
David Bach, a financial advisor and millionaire, told CNBC Make It that he recommends having a down payment of at least 10%. Although, ideally, you want 20% of loans to be ready to apply for a mortgage, he says
You should also consider all the additional costs badociated with home ownership, including mortgage insurance, taxes, homeowners insurance, maintenance and any renovations you may have to make. If you include these costs when buying a home, you will avoid the # 1 mistake that more than 60% of Millennials regret doing, which is "underestimating the hidden costs badociated with" purchase, possession and maintenance. a house.
Depending on where you want to live, the time it will take to save for a down payment will vary. To begin, here is the time it would take to save money to buy a home with an average income in 10 major cities in the United States.
Do you like this story? Subscribe to CNBC Make It on YouTube!
Do not miss: The salary you must earn to be able to buy a house in 15 major American cities
A happy couple in front of their new home.
Twenty / 20
Source link
