It’s National Homeownership Month and a large majority of people still believe owning a home is part of the American Dream, but getting there seems to be more challenging than ever.
TD Bank’s inaugural Financial Preparedness Report, Consumer Index was released at the end of April, and 90% of the more than 5,000 U.S. adults surveyed said homeownership is part of the American Dream, with 54% of respondents strongly agreeing with that statement.
At the same time, only 26% of non-homeowners surveyed had a positive outlook about their ability to purchase a home. And a third of all respondents (33%) had a negative outlook on their ability to buy.
Across all respondents, the top factors influencing homebuying decisions are affordability (55%), the cost of borrowing (32%), and concerns about economic uncertainty or job stability (29%).
TD Bank is headquartered in Cherry Hill, N.J., and serves customers from Maine to Florida. For the survey, market-specific interviews were conducted in Boston (502), New York City (501), Philadelphia (502), Charlotte (502), and Miami/South Florida (502). The remaining 2,504 interviews were completed among adults across the rest of the United States.
Steve Kaminski, head of U.S. residential lending at TD Bank, leads mortgage and home equity teams. He has been in residential lending for almost 30 years and said during an interview with The Mortgage Note that the survey results are not overly surprising.
“I think they tend to line up with what we see and hear from our customers, and what the economic data is telling us as well, and affordability continues to be that issue,” Kaminski said.
Kaminski said high home prices continue to create challenges for buyers.
“It’s probably the toughest environment we’ve seen. As those specific respondents noted, with affordability being the issue, home prices remain high in most regions. We see that across our footprint,” Kaminski said.
At the same time, mortgage rates have not come down to support budgets for many potential first-time homebuyers. They remain in the upper 6% range.
It is now estimated that a U.S. household needs to earn $114,000 annually to afford a median-priced home. That’s up 70.1% from $67,000 just six years ago.
There is a silver lining here.
“I do see consumers much more aware of their financial status, and they are proactively working to improve it,” Kaminski said. “The results show they are very focused on budgeting, which is critical, and generally being prepared for emergencies. That’s a good thing.”
Kaminski said people who are considering a home purchase should connect with a trusted lender. It’s not just about fully understanding what is required to qualify for a mortgage. Trusted lenders can help borrowers assess whether it’s the right time for them to buy a home.
“It’s a significant commitment and financial decision and requires a great deal of planning and preparation, and not everyone’s situation is the same,” Kaminski said. “It’s critical that you don’t rush into this.”
TD Bank offers first-time homebuyer programs in addition to online tools and materials that can help in the homebuying process.
“We provide multiple affordable loan programs to support our communities and customers, so in addition to your government home loan programs like FHA and VA, or low down payment options through Fannie Mae and Freddie Mac, we have our own proprietary affordable home loan options like TD Home Access and TD Right Step, which include low down payment solutions along with down payment assistance options to increase that affordability,” Kaminski said.
There’s a total of $698 billion worth of homes for sale in the United States, and housing supply is at a five-year high, according to a report from Redfin.
However, homebuyer demand is falling as many of the people who can afford to buy a home are reluctant to do so amid fears of higher prices for everyday goods and a potential recession under President Donald Trump’s leadership.
U.S. Department of Housing and Urban Development Secretary Scott Turner said in a statement on Tuesday that America’s long tradition of homeownership has empowered families since the founding of our nation. HUD is celebrating the 24th annual National Homeownership Month.
“Homeownership plays a critical role in the values of life, liberty, and the pursuit of happiness,” Turner said. “We know owning a home is priceless because a home is a place of sanctuary. It’s a place of comfort, joy, and safety. It’s also the foundation of generational wealth and legacy.”
Turner said under Trump, HUD is “firing on all cylinders to help more Americans achieve the dream of homeownership.”
