We’ve all heard a lot about how income affects homeownership, but a new report from Zillow indicates that stage of life may impact homeownership even more. Income, on the other hand, has more to do with the type of home they can afford to buy, than with the decision whether or not to buy in the first place.
The report also found that for those stages of life when Americans deem home ownership more important, income level actually plays a small role in whether or not they buy a home.
Homeownership is most important to:
People in these situations are much more apt to want to purchase a home, according to the report. And while you might think that households with two working adults will have a higher rate of homeownership just because of higher income, that doesn’t appear to be the case, with the exception of couples under the age of 35.
For older adults, for example, the instances of homeownership are only 1% higher – or 82% – for couples where both have incomes than for couples with only one income. But for couples under the age of 35, the impact on homeownership was much greater – 13% – when adding an extra income.
Making a down payment on a home is a much easier feat for a combined household than it is for a single person. So while income doesn’t affect attitudes about homeownership so much, it does impact the length of time it takes those who want to own homes to save for a down payment.
“Single earners would take more than 12 years, while partners with one income would take six to 8.5 years, and partners with two incomes would take 3.6 to 4.9 years,” the report said.
Age is also relevant to the ability to make a down payment because those who are younger and earlier in their careers tend to earn less. Home ownership rates are much lower right now for young couples with dual incomes as compared to their older counterparts, but down even more significantly for young couples with only one income.
However, despite the challenges to saving for a down payment, young people who really want to own homes will still typically find a way to do so, regardless of their income level, according to the report. Some of the avenues they pursue to make homeownership a reality include: buying smaller homes, buying less expensive homes and buying homes in less competitive markets, even if that means moving farther out of the areas where they originally wanted to buy.
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