The homeownership rate in the United States has been edging up since 2016. It currently stands at 64.8%. The figure was as high as 69.2% in 2004 when the housing market was fueled by easy credit and no-verification home loans.
That level may be unachievable again in a more sensible mortgage lending environment, but there is still room for millions more renters to become homeowners. So what would be needed to make more Americans homeowners?
In a phrase, relief from debt and more savings.
Freedom Debt Relief commissioned a January 2019 survey of 2,195 American consumers between the ages of 18-65. The results shed light on the obstacles that consumers face on the road to homeownership. Here are some of the findings:
When it comes to credit card debt, 53% of respondents indicated that they carry a balance month-to-month on one or more credit cards. Across all age ranges in the study, the largest use of credit card debt was for daily expenses like food, fuel, and utilities. Higher debt loads reduce the amount of the home loan that a buyer can qualify for and may prevent a consumer from obtaining a mortgage altogether.
Here is how credit card debt load breaks down between the age groups in the Freedom Debt Relief survey:
Freedom Debt Relief is the largest negotiator of consumer debt in the nation. The San Mateo, California firm employs more than 2,200 people at its campus in Tempe, Arizona. Freedom’s Head of Corporate Communications, Michael Micheletti, provided the data for this article.
Debt is a trap, especially student debt, which is enormous, far larger than credit card debt. It’s a trap for the rest of your life because the laws are designed so that you can’t get out of it. If a business, say, gets in too much debt, it can declare bankruptcy, but individuals can almost never be relieved of student debt through bankruptcy.
– Noam Chomsky, American linguist and social critic
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