Many Houstonians are eager to buy a home — but are they ready for the down payment?
Houston remains a place where residents believe in owning a home, and a good number of them are stashing away money for a down payment, a new survey shows.
In the survey conducted by rental marketplace Zumper, 74 percent of Houstonians said they still believe the American Dream involves home ownership. Houston ranked highest among the three major Texas cities, with Austin in second place (66 percent), and Dallas in the basement (57 percent).
The survey also indicated that 81 percent of renters in Houston indicated they’re planning to buy a home at some point. And only one-third of those future homeowners have not set aside at least $1,000 toward a down payment.
In Austin, by comparison, 42 percent of those future homeowners haven’t set aside at least $1,000 toward a down payment. And in Dallas, the survey indicated even more would-be homeowners — 46 percent — hadn’t saved that minimum amount.
A survey earlier this year by real estate marketplace Zillow found that socking away money for a down payment was the biggest barrier to homeownership for renters.
“Thanks largely to low mortgage interest rates, monthly mortgage payments are generally more affordable than monthly rent payments, making homeownership an attractive financial option for many current renters,” Zillow says. “But the sometimes hefty down payments required to buy in the first place are preventing many renters from taking advantage of the savings.”
Zillow’s chief economist, Svenja Gudell, says that although it’s possible to make a down payment as low as 3 percent, the tradeoff is a higher interest rate along with expensive private mortgage insurance (PMI).
In the Zumper survey, Austin and Houston were tied for the most aspiring homeowners (81 percent), with Dallas well behind at 72 percent.