There are many myths about buying a home that can make it feel intimidating and out of reach. The truth is, the path to homeownership is easier for people who do their research — and keep a sense of humor throughout the process.
Here are some interesting and fun facts about buying a home to keep you on your toes.
1. Some Mortgage Lenders Offer No-Closing-Cost Loans
Closing costs cover the third-party expenses of taking out a mortgage and transferring legal ownership to your name, and range from 2% to 5% of the purchase price of the home. That can be a lot of cash, in addition to your down payment, which is why some lenders offer no-closing-cost loans. Instead of paying closing costs upfront, you’ll pay by rolling them into your loan amount or by agreeing to a higher interest rate.
2. You Don’t Need To Put 20% Down
For many people, figuring out how to save for a down payment is the biggest barrier to buying a home. While a down payment that’s at least 20% of the purchase price lets you avoid paying for private mortgage insurance, most loans allow you to put down a lot less. For example, conventional loans are available to qualified borrowers with a minimum down payment of 3%, and some government-backed loans require no down payment.
3. 47% of Homeowners Are Between Ages 31-55
According to a 2021 report from the National Association of Realtors, almost half of new homebuyers are between ages 31 to 55. Homebuyers ages 31 to 40 account for 23% of all home sales, while buyers ages 41 to 55 make up 24% of home sales.
4. The US Homeownership Rate Is 65.5%
If your friends have started buying homes and you’re still renting a home, you may feel like you’re not keeping up. However, the homeownership rate was 65.5% in 2021. This means roughly two-thirds of American adults own a home, and about one-third does not.
5. 86% of Homeowners Use a Real Estate Agent
Your real estate agent or Realtor is a valuable member of your homebuying team. You can lean on their experience and expertise to guide you through the confusing or intimidating parts of the process, and to save you time and money. According to a November 2022 report from NAR, 86% of homebuyers worked with a real estate agent to help them purchase a home.
6. You Don’t Need To Have Perfect Credit
Many home loans often require a minimum credit score. Conventional conforming loans — the most common type of mortgage — require a credit score of at least 620, while loans backed by the Federal Housing Administration are available to qualified borrowers with scores as low as 500. Two other types of government-backed loans — from Veterans Affairs and the Department of Agriculture — have no minimum credit score requirement.
7. Buying a Home With No Credit Is Possible
If you haven’t done much to build credit, it can be tricky — but not impossible — to buy a house with no credit. Many lenders use automated underwriting processes that may rule out borrowers with thin credit files. But if you seek out a lender that uses manual underwriting, a real person will evaluate your application and consider atypical factors when deciding whether you can afford a mortgage.
8. The Most Popular Reason for Buying a Home Is the Desire To Be a Homeowner
Homeownership comes with many perks, including the opportunity to build home equity. But, according to the 2021 survey from NAR, the top reason that people bought a home was simply because they wanted a home to call their own.
9. Single-Family Homes Are the Most Popular Home Type
10. 31% of Homebuyers Are First-Time Buyers
11. 51% of Homebuyers Find Their Home Online
The ability to shop for homes online has been a major boon for buyers. Fifty-one percent of homebuyers found their home online, while 28% found it through their real estate agent. Only 7% of respondents found their home by driving past a property with a for-sale sign in the yard.
12. Buyers Ages 41-54 Have the Highest Household Income
Homebuyers ages 41 to 56 had the highest median household income of any age group, at $113,300 in 2019. The next-highest-earning group of homebuyers was those ages 30 to 39, with a median household income of $105,600.
13. Having a Mortgage Can Improve Your Credit Score
“One of the biggest financial myths is that buying a house will ruin your credit score,” says Shaun Martin, owner and CEO of The Home Buying Company in Denver. “On the contrary, a mortgage can actually improve your credit rating if you make your payments on time. A mortgage is one of the many factors that go into calculating your credit score, and it can be a great way to demonstrate your responsible borrowing habits.”
14. About One-Third of Homebuyers Have Kids
A common reason people decide to purchase a home is because they have kids or are starting a family. According to the NAR survey, 33% of homebuyers had children under age 18 living at home.
15. You May Have To Make Some Compromises
While it’s possible you’ll find your dream house, it’s rare to find a home that perfectly fits every need. For example, you might find a home with your dream layout, but it’s farther from your target neighborhood than you had hoped.
Twenty-three percent of respondents in the NAR survey said that the price of the home was an area where they had to compromise. Twenty percent of respondents said they had to compromise on the condition of the home, while 18% compromised on the size.
16. The Most Common Reasons To Get Denied for a Mortgage Involve Debt
To get a home loan, you’ll need to meet certain eligibility requirements. Thirty-five percent of respondents to the NAR survey who had a mortgage application denied said it was due to their debt-to-income ratio, while 24% said it was due to a low credit score.
17. You Don’t Have To Pay Off Your Student Loans Before You Buy
Some people are eager to buy a home but feel that they should wait until they’ve paid off their student loans. However, 22% of all buyers in the NAR survey said they still had student loan debt. Breaking down the data by age, 43% of buyers ages 22 to 30 still had student loan debt, and 43% of buyers ages 31 to 40 were still paying off student loans.
18. There Can Be Room for Negotiation
Although the seller sets their asking price, the purchase price may be negotiable. If the seller is looking to sell the house quickly, they may agree to a lower price. However, if multiple bidders have made an offer on the house and you’re facing competition, you may need to put in an offer that’s higher than the asking price to come out on top.
According to the NAR survey, 30% of respondents paid 100% of the asking price, while 34% paid between 95% and 99%, and 13% paid between 101% and 110%.
19. There Are Over 750,000 Houses on the Market in the US
As of October 2022, there were 753,845 active home listings on the U.S. housing market. That number is up considerably from October 2021, when there were 564,790 active listings.
20. Searching For a Home Takes an Average of 8 Weeks
It’s possible that you could find the right home quickly. However, it’s a good idea to take some time and view as many listings as you can before deciding. According to the NAR survey, homebuyers took an average of eight weeks to search for a home.
21. Homebuyers View an Average of 9 Homes Before Purchasing
Similarly, homebuyers viewed an average of nine different properties before they decided on the one they wanted to buy, the survey found.
22. Half of Homebuyers Have Previously Owned a Home
While first-time homebuyers accounted for roughly a third of home sales, 51% of respondents to the NAR survey said they already owned a home before buying their next one.
23. Homebuyers Say Finding the Right Property Was the Hardest Part
If it’s your first time buying a home, the process itself can be intimidating. But 53% of NAR survey respondents said finding the right home was the most challenging part. Only 17% said the paperwork was the hardest part, and 15% said understanding the process was most difficult.
24. Most Homebuyers Want a Master Bathroom and Fenced-In Backyard
A 2020 survey by Coldwell Banker Real Estate asked respondents to name which features would make them more likely to purchase a home. Sixty-three percent named a private bathroom connected to the master bedroom, 51% said a fenced-in backyard, and 46% said hardwood floors.
25. Carpeting Isn’t Popular These Days
In the same survey, only 23% of respondents said that carpeting would make them more likely to purchase a home.
26. Most People Buy a Previously Owned Home
According to the NAR survey, only 15% of home sales are for new homes, while 85% are for previously owned homes. Many homebuyers consider previously owned homes a better value, while buyers of new homes often are seeking to avoid problems with plumbing or electricity.
27. Millennials Are Buying the Most Homes
Millennials have gotten an unfair reputation for buying coffee instead of saving up, but the truth is, they’re buying the most homes. In 2021, millennials made up the largest share of homebuyers, at 37%.
28. The Average Home Is 1,900 Square Feet
The NAR survey showed that the average home was 1,900 square feet, came with three bedrooms and two bathrooms, and was built in 1993.
29. Most Homebuyers Prioritize Location Over Size
For a majority of homebuyers, finding a property in the right location seems more important than buying the biggest home you can afford. Eighty-one percent of respondents said they value the location of a home over its size.
30. Living Near Family Is Important to Most Homebuyers
Many homebuyers only look for homes that aren’t too far away from their loved ones. Seventy-three percent of respondents in the Coldwell Banker Real Estate survey said that living near family is a priority when they search for homes.
31. Your Mortgage Payment Won’t Be Your Only Housing Expense
“Many people are shocked to learn that their monthly mortgage payment is just the beginning when it comes to owning a home,” Martin says. “There are also property taxes, insurance, and maintenance costs that must be considered. Before you start house hunting, make sure you have a realistic budget that takes all these factors into account.”