In order to get a sense of how comfortable people currently feel about buying a home, the Reviews.com Research Team conducted a study of 2,159 US adults. The study provided insight into clear demographic splits, most notably age, when it comes to feeling confident enough in personal financial stability to purchase a house.
- 62.6% of those under 35 years old responded that they are somewhat or very unconfident in their ability to ever buy a home.
- In the under 35 age bracket, the overwhelming number of responses expressed they are “very” unconfident, at 46.7% of total responses, the highest lack of confidence in home buying abilities we have recorded.
- This is in contrast to only 41.7% of those 35 and older expressing they are somewhat or very unconfident in their ability to ever buy a home, with only 28.4% saying they’re “very” unconfident.
- Men generally responded that they felt more confident in their ability to buy a home than women, by a margin gap of approximately 10%.
It makes sense that as we age, our confidence in our ability to afford buying a home would increase. Generally, annual income increases through career advancement, savings account balances climb, nest eggs provide emergency savings for worst-case scenarios, and household income can increase through marriage and partnerships.
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But wages have stagnated for many over the last decade, the COVID-19 pandemic has caused widespread layoffs and economic hardship, millennials and Gen-Z are getting married later, and while financial support from family can help, it is only giving a minority percentage an advantage when it comes to home buying.
In order to get a sense for trends in the confidence of potential home purchases, the Reviews.com team ran a study, conducted October 22nd – October 26th, 2020, and found wide gaps between age groups when it came to home buying confidence.
Specifically, there is a sharp line at 35 years old, where those older tend to express a greater general confidence in their ability to buy a home, and those younger expressing a steep lack of confidence.
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|Those under 35|
|Those 35 and over|
Over the past several decades, the National Association of Realtors has been tracking the average age of first-time homebuyers and that age has seen a steady climb. While it used to be more common for someone in their mid-to-high twenties to buy their first home, that age has now crept into the lower thirties and it does not appear this trend will shift downward anytime soon.
“For us, our current rent is probably about the same as a mortgage payment, but we just can’t get enough cash saved up for a down payment,” said one couple we spoke with regarding their home buying plans. While FHA loans can make it possible to put less down for a first home, many young people express fear in taking on that much debt without first making a substantial down payment to establish some equity.
Many millennials’ first exposure to the home market was in the late 2000s, when the entire housing marketing collapsed along with the global economy right as their generation was finishing college and starting their careers. It makes sense that this would create incredible anxiety for some when it comes to making a first home purchase, aligned with student loan debt and stagnant salaries.
It’s also important to note that mortgages come with a long list of costs and fees associated with applying for the initial loan. Between closing costs, home insurance, title fees, high interest payments for the first several years of the loan and more, the risk can feel overly burdensome for those walking through this process for the first time.
- Survey conducted October 22nd – October 26th, 2020.
- 2,159 US residents surveyed online and anonymously.
- 51.9% female respondents, 48.1% male respondents.
- Age range sample percentages between 12.6% and 19.4%
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