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10 Facts Home Buyers Should Know – And Why They Matter

The Facts About Home Ownership

We live in a data-driven society. Numbers tell a story, but not always the full story. In this article, we’ve compiled 10 interesting and insightful home buying and home ownership stats. More importantly, we provide explanations for why the numbers are important and what they tell us. Would-be and existing homeowners can use these insights to make informed buying and borrowing decisions.

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#1. On average, buyers spend 10 weeks searching for a home and view an average of 10 houses.

What this tells us: You can’t rush the home buying process. Be patient. Buying a house is a big investment. You may live there 30 years or longer. You will spend a good chunk of money on the home. What does it matter if you look at 10 or even 20 houses, so long as you find that one that’s right for you.

#2. For buyers aged 28 and younger, the median purchase price of a home was $177,000.

What this tells us: Millennials are now the largest home buying segment in America. Buyers aged 22 through 28 are the youngest segment of millennials. To afford a $177,000 house, presuming you put down a 20% down payment ($35,000) on a 4% 30-year fixed-rate mortgage, your annual household income would need to be approximately $30,000.

#3. For buyers aged 29-38, the median purchase price of a home was $274,000.

What this tells us: This data point is proof of the value of owning a home. The median price for this home buying segment is nearly $100,000 higher than the 28 and under age group, meaning that over a ten year span, the average homeowner has accumulated $100,000 in additional wealth, much of it largely attributable to their home.

#4. According to first-time buyers, paying down debt is the number one reason they struggle to afford a home, cited by 26% of home buyers.

What this tells us: Don’t let debt bite you in the butt. When it comes to qualifying for a mortgage, income and debt are the two biggest qualifying criteria. Not enough of one and too much of the other will hurt you. While you cannot directly control how much you make, you can control how much you spend and keep your debt under control.

#5. Median monthly housing costs are $1,566.

What this tells us: This tells us what the median homeowner can expect to pay on a monthly basis for home ownership. These costs include mortgage as well as taxes and insurance. As you begin your home hunting journey, keep this figure in mind to make sure you can afford the home you desire. Using the 28/36 rule, which says you should spend no more than 28% of your monthly income on housing expenses, an annual household income of approximately $67,000 is needed for these expenses.

#6. The average mortgage loan amount in 2019 was $184,700.

What this tells us: Assuming a 20% down payment on a 30-year fixed-rate mortgage at 4%, the monthly payment for this mortgage amount would be $882.

#7. For new, approved, noncommercial mortgages, the average credit score was 732 in 2019.

What this tells us: Credit score matters when it comes to getting a good rate on a mortgage. Do what you can to improve your credit score – pay down debt, pay your bills on time and don’t apply for new credit.

#8. Mortgage rates remain at record lows. Below 3%.

What this tells us: This tells us there are buying and refinancing opportunities. Mortgage rates continue to be crazy low. Last week, mortgage rates fell to yet another record low, for the eleventh time since the beginning of the year. The average interest rate on a 30-year fixed-rate mortgage fell to 2.8%, according to Freddie Mac. That’s the lowest level in the nearly 50 years of the mortgage giant’s survey. The 15-year fixed-rate mortgage dropped to 2.33%.

#9. The running average annual 15-year mortgage rate for 2020 through Sept. was 2.71%.

What this tells us: Rates on 15-year mortgages are usually lower than 30-year loans. If you can afford the little bit higher monthly payments that come with a 15-year mortgage, you will pay less total interest over the life of the loan and you will pay off your loan faster.

#10. For 2020, housing prices have risen approximately 5%.

What this tells us: Owning a home continues to be a road to prosperity. Home values continue to appreciate. Owning a home can be a valuable contributor to your overall wealth.

Sources: 1,2,3: National Association of Realtors, 2019; 4: Coldwell Banker, 2019; 5: US Census Bureau, 2018; 6, 7: Federal Housing Finance Agency, 2019; 8: CNN ; 9: Freddie Mac, 2020; 10: Joint Center for Housing Studies, Harvard University, 2020

Go Beyond the Numbers

Looking for a new home or thinking about refinancing? Go beyond the numbers and get the loan that’s right for you. Call 1-866-532-0550 or locate a Mortgage 1 loan officer near you to get the process started using our digital mortgage app. It’s fast and easy! It only takes 15 minutes.