Despite the financial hardships of 2020 and the pitfalls of the housing market, new data highlights Americans’ optimism and reveals they are proactively carving their path when it comes to this big life moment: purchasing a home.
MyWalletJoy’s 2021 Hope for Homeownership report found that 1 in 6 (17%) Americans who have not bought a home since March 2020 are planning to do so within the next two years, or before December 2022. That intent was even higher among younger generations, with 28% of 18- to 34-year-olds planning to purchase a home within the next two years.
The report, commissioned by online personal finance resource MyWalletJoy, which engaged YouGov PLC to poll the views of a representative sample of 2,723 American adults, reveals that the handful of Americans planning to purchase a home by December 2022 are meticulously taking control of their finances to reach their goal.
“Although it has been a tough year for Americans in all aspects of personal finance and big life moments, we are happy to see that optimism around buying a home is still very much alive,” said Yvette Ramos, a MyWalletJoy spokesperson. “As many are still in the savings and planning stages of this venture, MyWalletJoy is here as a resource for additional insight and financial knowledge to help hopeful homeowners navigate this sometimes-stressful process.”
Americans Are Thinking Differently About Down Payments
While the COVID-19 pandemic has forced many Americans to rethink their finances and shift their plans, those who still plan to purchase a home are changing the way they finance a down payment and how much they put down.
Over half of Americans (52%) who are planning to purchase a home before December 2022 reported they aim to put down between 3%-19% of the final home price, while only 1 in 7 (14%) are sticking to a down payment of more than 20% and just under 1 in 8 (12%) will put down the traditional 20%.
While Americans are committing to lower amounts when it comes to down payments, they are still opting for traditional methods of obtaining those payments, including using their savings as well as taking out personal loans. The report found that more than 2 in 5 (43%) of these aspiring homeowners are currently saving for homeownership and plan to use personal savings and/or investments. Additionally, more than 1 in 6 (18%) plan on taking out a personal loan from an alternative lender, and 1 in 11 (9%) cited they would tap into their retirement account/savings.
Low Salaries and the Pandemic Are Preventing Many Americans From Purchasing a Home
Buying a home is a huge life moment that requires months and sometimes years of careful financial planning and discipline. Yet, regardless of how much time is taken to save the necessary funds, there are a few recurring factors that keep Americans from reaching their homeownership goals.
The main factor hindering Americans who do not have current plans to purchase a home within the next two years is salary. Nearly 1 in 3 (31%) said they do not make enough money or have a high enough salary.
Unfortunately, the data shows that the financial implications of the COVID-19 pandemic have further dented Americans’ hope of buying a home in the near future. Of those who haven’t purchased a home since March 2020 and do not have plans to do so in the next two years, 7% cited they are experiencing or anticipating too much financial turmoil caused by COVID-19.