Survey: Down payment concerns delay homeownership for many

Despite strong interest in home-buying, affordability challenges and misconceptions about down payments are deterring many potential buyers, according to a new survey from NeighborWorks America.

The nonprofit organization reports that 27% of U.S. adults say they plan to buy a home within the next year. However, among those who are postponing or not planning to purchase, one-third cite insufficient income relative to home prices as the primary obstacle.

An additional 22% are waiting for home prices to fall before making an offer.

“The mismatch between home prices and income is freezing out individuals and families who want to buy a home,” said Marietta Rodriguez, president and CEO of NeighborWorks America. “We believe persistent myths about downpayment requirements to buy a home are also holding back consumers from entering the home buying market.”

Down payment assumptions often incorrect

The survey found that nearly 40% of respondents believe they need at least a 15% down payment to qualify for a mortgage.

In reality, the median down payment in 2024 for first-time buyers was 9% — with many able to put down as little as 3% through programs offered by NeighborWorks network organizations. These results echo recent National Association of Realtors findings regarding down payment misconceptions.

Last fiscal year, NeighborWorks America helped more than 16,000 people become homeowners.

“NeighborWorks organizations across the country are expert in advising qualified buyers on how to access down payment assistance programs that help bridge affordability gaps,” Rodriguez said.

Demographic splits

The report also highlights demographic differences in home-buying intentions.

While 39% of both Gen Z and Millennials say they hope to purchase a home in the next 12 months, only 23% of Gen X and 10% of Baby Boomers say the same.

Interest in homeownership is particularly strong among Black adults, 41% of whom say they intend to buy in the coming year. That compares to 32% of Hispanic adults and 25% of White adults. The Black homeownership rate in 2024 was 46.4% — below the national average of 65.7%.

“I’m excited to see young people interested in homeownership,” Rodriguez said. “However, our survey clearly shows that a large number of people are discouraged. In fact, nearly one-third of adults believe homeownership is out of reach for them, and another 14% are unsure homeownership is attainable.

“Getting the right information to consumers about the process, programs and possibilities to achieve homeownership is what NeighborWorks organizations are here to do every day.”