Most renters in the United States want to own a home in the future, but there are obstacles that often prevent them from achieving that dream, according to a survey released by the National Association of Realtors. The top hurdle, cited by 82 percent of respondents, was scraping together the funds for a down payment and closing costs.
Long Island’s would-be homebuyers grapple with the same issue, perhaps more than most. “Property tax escrows and the New York State mortgage tax create very high closing costs here,” says Lynne Law of the Long Island Housing Partnership.
Having job security is the next biggest challenge to home ownership, survey respondents said. In an iffy job market, “people are more inclined to rent rather than own, pushing down home sales, in part because young people may not want to be tied to a particular geographic area and want to be flexible in accepting jobs,” says Pearl Kamer, chief economist of the Long Island Association business group.
The annual survey, which measures how affordable-housing issues affect consumers, also found that 77 percent of renters said they would be less likely to buy a home if they were required to put down a 20 percent down payment on the home, and 71 percent believe a 20 percent down payment requirement could have a negative impact on the housing market.
NAR’s release of survey results comes amid a debate over federal regulators’ proposed rule defining “qualified residential mortgage.” Under the proposal, lenders would have to put into reserve 5 percent of each home purchase loan unless the borrower has chipped in at least 20 percent down payment. NAR and other critics said this would push many lenders to ask for 20 percent down or raise fees on those who can’t pay so much up front.