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A place to call home: Americans favor homeownership over renting

Despite a competitive housing market and current concerns about housing affordability, 70% of Americans still see owning a home as a clear sign of success in adulthood, according to Wells Fargo’s 2019 “How America Views Homeownership” survey.

Seven in 10 respondents of the survey of 1,004 adults 21 years and older say that owning a house is on par with having a career as a sign of a successful adult. Those surveyed note that they see homeownership as a clearer sign of success over getting married (32%) or having children (34%).

Close to 90% of the respondents say that the benefits of homeownership outweigh the drawbacks. If they could do it all over again, current homeowners say they would still choose to buy their home (93%) instead of continuing to rent, and nearly all (95%) note that owning a home is a better financial decision in the long run than renting.

Affording a down payment is seen as the primary hurdle to buying a home, according to 27% of those surveyed, with 38% of aspiring millennial homeowners naming it their biggest challenge to achieving homeownership. Wells Fargo notes, however, that some mortgage lenders allow qualified buyers to put as little as 3% down on a home.

Nearly 8 in 10 homeowners would be willing to move to a smaller city or town to afford their home, and 74% say that they would consider buying a smaller home with fewer amenities.

First-time homebuyers frequently look to condominiums as a lower-cost housing option. Roughly 40% of the 347,000 community associations in the U.S. are condominiums, according to the 2018-2019 National and Statistical Review for Community Association Data from the Foundation for Community Association Research. Recently updated requirements from the Federal Housing Administration should make lending easier for condominium unit buyers.

More than 73 million U.S. residents currently live in a community association—up from 62 million in 2010. Community associations are growing due to the value of collective management, privatization of public maintenance services, and the expansion of affordable housing options.

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Kickstart saving: Millennials turning to crowdfunding to buy homes

Millennials are buying homes later in life or forgoing the purchase altogether compared to previous generations. Between student loan debt, the high cost of living in large cities, and rising housing prices, buying homes has become less practical for young people, according to Investopedia.

Nearly 70% of millennials identify saving for a down payment as the biggest barrier to purchasing a home, according to Bank of America’s 2019 Spring Homebuyer Insights Report. When entering the job market, college graduates with student loan debt must save for an average of 12 years to afford a 20% down payment, compared to 7.6 years for those without student loan debt. For millennials without a college degree, that number rises to nearly 17 years, research from Apartment List finds.

Crowdfunding could be the means to make owning a home a reality for millennials.

Touting itself as the first crowdfunding platform for homebuyers, HomeFundIt offers millennials a way to enlist friends and family to help fund their down payment and other closing costs associated with owning a home. Once they complete a conventional financial agreement with a bank or a mortgage lender, millennials can tap into their networks to start saving.

HomeFundIt offers aspiring young homeowners two ways to boost their savings:

Crowdfunding. Homebuyers can encourage friends and family members to donate to their fund directly. They can tap into their networks by sharing a personal story on social media along with the link to the down payment fund. There are no transaction fees, and funds are available immediately. The program also gives young homeowners a grant of up to $1,500 for closing costs and offers free homebuyer education. The crowdfunding option is limited to one year before buying a home.

Cash-back rewards. The program, called UpIt, allows the potential homebuyer, their friends, and family members to have a portion of the money they spend on everyday purchases placed in a savings account for a down payment. Up to 20% of everyday eligible purchases at participating retailers such as Walmart, Macy’s, or Expedia are applied to the crowdfunding goal. The homebuyer doesn’t need to be prequalified, and there’s no time limit on when to have the funds raised. The money is available within 24 hours.

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Homeowner education: Be resourceful with CAI’s HOAResources.com

The best community associations have knowledgeable governing boards, highly-engaged residents, and educated and trained professional managers leading their communities. CAI has believed that since its founding in 1973, and it’s why we offer information, education, and resources to members and the general public. It’s why we recently launched HOAResources.com, a digital news site for the millions of residents living and working in condominium communities and homeowners associations worldwide.

We recognize that the community association model has evolved and grown up over the years, becoming a well-established and increasingly successful form of community governance and an essential component of the U.S. housing market.

There’s an increasing need to educate, train, and provide the latest news and resources to the millions of potential homebuyers, homeowners, and renters living in these communities. After all, 61 percent of all new housing built for sale is in a community association.

The new site lets CAI members and the general public find practical advice on common issues in the community association housing model. The site will address HOA basics, financial planning, rules and governing documents, as well as security and safety. Many time-tested best practices are showcased on the site, often through free, downloadable documents.

Go to www.HOAResources.com, and share the information with homeowners, friends, and colleagues.

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