The tax credit fed right into this mindset - that about half the country feels they could never save enough to get into a home. What a shame that the 18% who feel they need a low down-payment loan are probably out of luck for the foreseeable future, unless FHA is an option for them.
Amy shares some interesting survey results with us. Take a look...
A poll was recently conducted by the National Foundation for Credit Counseling. The results of more than 2000 who responded were astounding.
The question asked was whether consumers felt they could meet the down payment requirements in today's real estate market.
Only 12% responded that they would have no problem coming up with the required 20% to put down on a home.
18% responded that they would need a loan that required a much lower down payment.
20% responded that they would have to borrow the money no matter how much was required.
A whopping close to 50% responded that they would never be able to save enough money for a down payment.
What concerns me is the mindset of today's consumer. Have we become a people who are unable to save our money for a home or anything else? Are we a nation so filled with the need for instant gratification that we are living paycheck to paycheck?
Saving for a home is not something new. We come from generations of people who saved their money..for a rainy day or a house..whatever.
What I'm seeing today, is more and more people who don't know how to save. They want it now with no money down. They want it now, but they can't pay for it now, so it goes on the credit card with no thought as to how much that item is really costing them month after month after tacking on interest.
So, 70% of potential home buyers feel that they will NEVER be able to save enough money for a down payment or that they will have to borrow the down payment no matter how much it is? Really? So, what can we do to fix THAT???
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That's a pretty shocking poll. I bought 7 houses between the ages of 28-31 and another one when I was 37, all for cash or large down payments, up to 33%. This is just more proof positive of the horrible direction our country is now in. Can you imagine 50% of the people questioned never believing they'll have enough for a down payment? Keep in mind that many of them would rather by a nice car to show their friends.
Real estate is forever. It's still the best investment on earth, if you ask me. There's nothing like renting a house and getting a check from someone else every month.
Scott Miller, Realty Associates, Boca Raton, FL
Margaret,
I agree with Scott! You can never lose in real estate!
Thanks for the post!
Scott - Congratulations! I imagine it's easier to buy a home at Florida prices than DC suburban area prices, but it's still a GREAT accomplishment. I wonder if that's the dichotomy here... maybe the half that don't feel they could ever save enough to buy a home live in expensive markets... 'Would love to see a geographical breakdown on these results.
Michele - Five years ago, I would have agreed with you, but there are a lot of homeowners out there now who have lost some big bucks. If they can hang in there, I think it will come back but it will take a while.
Margaret, instant gratification is what it's all about, or else ask Mom and dad to do it for them. The sense of self sacrifice or hard work seems to be lost on a generation of people. The example is set by the people that emigrate here. They care nothing for credit, work hard save their money and only buy what they can afford to spend. American born youth need an education in life.
Hi Margaret,
This is one of the things that many disagree with me on. But having been through a long process - getting a doctorate and suddenly having the employment rug pulled out from under me. The fact is that education is gobbling up resources and taking up people's TIME. An article in the journal The Scientist discussed these hard facts. Most people in my field are earning less than $40k until they are in their forties - sometimes later. How on earth does anyone save for a home under those conditions? You've just lost about 20 years of prime savings time!
The combination of extensive educational requirements in some fields and the devaluation of salaries through outsourcing and insourcing of cheap H1-B labor are a big part of the problem. Some fields of work have become high-tech sweat shops. Wash, rinse, repeat accross the entire high-skilled employment spectrum and you have a huge problem.
Bottom line: People simply aren't making enough money. It really comes down to that. I'm not just talking about people with limited skills or even just college graduates. I'm talking about people who have invested years in education and their career development. Employers have the upper hand and are cracking the whip - so many I know who are paid for 40 hours are working 60-70 with no compensation for the overtime. With that kind of overtime - how do they do something "on the side" to make up the loss? I also know several people in my area that have taken salary cuts up to 30%. The alternative? The unemployment line. But they still work full time and then some. I won't even go into to the number of people i know who can't find work.
I wrote a blog about this a while back - and embedded a video with Elizabeth Warren. She puts to be the "myth" that it is instant gratification. She ran the statistics and it was pretty grim. This is the link to the blog - if you dont' want the link - I'll be happy to remove it. The blog outlines here stats which might be a good thing since the video is long. I wouldn't promote it if I didn't think it was worth listening to. Oh - skipping over the beginning helps - the introduction is a bit long.
Here is the link to the blog: Falling off the cliff - into the abyss
Here is the link to the lecture on YouTube: The Coming Collapse of the Middle Class