Will Debt Keep Americans From Buying a Home in 2020?

Affordable Home Updates for Staying or Selling
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Is 2020 the year to buy a home? Here’s what consumers are saying.

The answer is a consistent “yes,” but with consumers citing some important barriers to home purchase, and thoughts about rising costs and interest rates.

According to the latest Freedom Debt Relief survey, 56% of Americans believe 2020 is a good year to buy a home. Optimism runs especially high in the Silent Generation, with 76% agreeing. Fifty-eight percent of Baby Boomers think it will be a good year for a home purchase, followed by 56% of Millennials, 52% of GenXers and 51% of GenZers.

Increasing Home Prices, Mortgage Rates

Amid this optimism, 54% of consumers believe that home prices will increase during the year, and 46% believe mortgage rates will increase.

At least half the respondents in every generation think home prices will increase.

GenZ: 54%

Millennials: 50%

GenX: 55%

Baby Boomer: 58%

Silent Generation: 65%

Slightly fewer respondents (46%) believe mortgage rates will increase over the next 12 months. A quarter (25%) think they will stay the same, while 12% think they will drop. More Millennials believe rates will rise than do other generations.

GenZ: 45% believe mortgage rates will increase in the next 12 months.

Millennials: 49%

GenX: 48%

Baby Boomer: 43%

Silent Generation: 32%

Barriers To Home Buying

When asked which of the following they consider as barriers to buying a home in 2020, 41% of respondents said it was the cost of the down payment.

Among the generations, 44% of GenXers cited this as a barrier, while 43% of Millennials and 42% of Baby Boomers did.

High Housing Expenses

When asked to rank living expenses, 44% of respondents cited housing (rent or mortgage) as their highest expense. In fact, every generation ranked housing as the top expense:

GenZ; 23% said housing was their highest expense

Millennials: 45%

GenZ: 51%

Baby Boomers: 46%

Silent Generation: 28%

Overall, 28% of survey respondents said that the cost of housing cost more than they had anticipated in 2019. However, 35% of Millennials, 27% of GenXers and 29% of GenZers said it was more than expected. Only 12% of the Silent Generation and 21% of Baby Boomers found the cost more than anticipated.

Among survey respondents, 29% carry mortgage debt. The breakout among generations is:

GenZ: 9%

Millennials: 23%

GenX: 38%

Baby Boomers: 34%

Silent Generation: 24%

Conclusion

While most Americans believe 2020 is a good year to buy a home, the relative cost of housing, the inability to save for a down payment, and the cost of the monthly payments presents significant barriers to purchase for most people.

Methodology: Freedom Financial Network commissioned Atomik Research to run an online survey of 2,005 individuals in the United States. The margin of error is +/- 2 percentage points with a confidence level of 95 percent. The fieldwork took place Jan. 10-13, 2020. Atomik Research is an independent creative market research agency. Download the raw data here.

Michael Micheletti serves as the Director of Corporate Communications at Freedom Financial Network where he is responsible for the strategic communications planning, knowledge dissemination and outreach to key consumer audiences. Before joining Freedom he held a variety of high profile communication and consumer education roles focusing on healthcare, tax and housing. He is a former reporter for FOX News, CNN and served as news director for Clear Channel Radio San Francisco.