The current housing scenario seems to have steadied. The rate of home price growth is slow, mortgage rates are at their lowest and supply is also picking up. So what is holding Americans from taking the property plunge?
Fear apparently!
Wells Fargo, the American multinational financial services firm, conducted a survey on 2,017 adult respondents who either rent or own a home to find out their views about home ownership and discovered that though more than 68 percent of the Americans feel that now is the time to buy homes, they are reluctant about investing in a property in fear of not qualifying for a mortgage.
Thirty percent of the respondents said that only High Net Worth individuals or rich people can obtain a mortgage in the current market and 64 percent of them said one needed to have a very good credit score to qualify for a home loan.
In a separate Federal Reserve study last year, it was revealed that a fear of not qualifying for a mortgage was keeping 19 percent of the potential homebuyers off the market.
The Wells Fargo study found that lack of funds was the biggest barrier for the respondents to affording a down payment, the study found. The survey also revealed that the American dream of buying a home is still prevalent as 95 percent of the respondents said they wanted to buy a home if they didn't already own one.
"Although the homebuying process has changed in many ways in recent years, our survey found Americans still view homeownership as an achievement to be proud of and many believe that now is a good time to buy a home," Franklin Codel, head of Wells Fargo Home Mortgage Production, said in a statement.
"It is important for prospective homebuyers to feel empowered to ask lenders and real estate agents questions about available options, such as down payment assistance or FHA loan programs or VA loans for veterans," Codel added.
Many have blamed the banks of holding back a full housing boom and setting lending standards too high. But Banks have now grown ultra conscious about lending to low-income households because they do not want to take the risk of a huge loss once again.
