Renters are expressing a clear desire to become homeowners but high prices are standing in their way. According to a new survey conducted by the California Association of Realtors, half of current renters who want to buy a home said that they simply cannot afford it.
A large group of respondents stated that they have given up the idea of homeownership all together, at least until they see an improvement in their finances, lower housing prices or have saved enough for a down payment. Just under 20 percent of those surveyed stated that they cannot qualify for a mortgage while another 15 percent say they don't have enough savings to cover a down-payment.
FHA loans, which allow a buyer to put as little as 3.5 percent down, having been growing in popularity as high home prices and stagnant wages are among a variety of obstacles preventing potential buyers from coming up with the requisite 20 percent down-payment. Total FHA loan applications climbed nearly a tenth of a percent just last week alone.
Meanwhile, conforming no-point 30-year fixed mortgage rates average 3.625 percent while the 15-year rate is near 2.875 percent.
Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.