Americans Still Want to Own their Dream Home Despite Rising Home Prices

PenFed Credit Union National Mortgage Survey finds that 37 percent of adults and 52 percent of millennials are looking to purchase a home in the next two years

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PenFed Credit Union

Sep 18, 2018, 07:00 ET

TYSONS, Va., Sept. 18, 2018 /PRNewswire/ -- Americans are determined to own their dream homes – whether they buy or renovate – and despite current housing market trends, according to the recent PenFed Credit Union National Mortgage Survey released today.

The survey reveals that 37 percent of adults and 52 percent of millennials are looking to purchase a home in the next two years. Nearly all current homeowners (95 percent) like their home, but the majority (54 percent) would also like to renovate their homes. Additionally, the survey found that nearly half (48 percent) of those who do not currently own a home will be house-hunters over the next couple of years.

Nationally recognized market research firm, McLaughlin & Associates, conducted the survey on behalf of PenFed, the nation's second-largest federal credit union.

"Americans are undeterred when it comes to owning their dream home and we are finding that for many that means renovating their current homes," said Craig Chapman, vice president of mortgage sales and business development, PenFed. "At PenFed our second trust loans are up and we expect to end the year with a 20 percent increase over last year. Like many industry experts we expect this increase to continue."

According to the survey, two-thirds (65 percent) of homeowners didn't shop around for a mortgage, despite most likely being the biggest purchase a person can make. The results also identified common misconceptions around mortgages including:

The plurality (44 percent) believes the best mortgage is the one with the lowest rate. The lowest rate mortgage isn't always best and consumers should consider additional factors including the total closing costs and the broader annual percentage rate. It's also important to choose a company you trust and consider one that you already have accounts with since it can simplify payments.
The majority (58 percent) think an Adjustable Rate Mortgage (ARM) are for risk takers. An adjustable rate mortgage is perfect for those staying in their home for less than 5 years. A 5/5 ARM product has a fixed rate for the first five years and is likely to have a lower payment than a 30-year fixed-rate.
About half (48 percent) say being pre-qualified is not the same thing as being pre-approved, but a slight majority either says it's true (30 percent) or they are unsure (22 percent). Being pre-qualified may give you an idea of what you can afford, but it doesn't mean you are pre-approved for a loan, which entails a more comprehensive process and makes you a more qualified buyer.

Additionally, the survey found that most Americans would choose to build their dream homes in a relaxing location. The top-tier locations to build a dream home are on the beach (30 percent), a ranch/farm (22 percent), in their favorite city (22 percent), and in the mountains (18 percent). The bottom tier choices are on a golf course (3 percent), in outer space (3 percent) and under the sea/ocean (2 percent).

Despite the recent news of HGTV's recent purchase of the Brady Bunch home for a cool $3.5 million, half of adults would either want to live in the Fresh Prince of Bel Air house (26 percent) or the home in Full House (24 percent). The Southfork Ranch in Dallas ranked No. 3 (19 percent) followed by the Brady Bunch (13 percent), Little House on the Prairie (9 percent) and the Addams Family (9 percent).

The survey interviews were conducted online from August 25 – August 30, 2018, among a representative sample of 1,000 adults, age 18 and over, and has an accuracy of +/- 3.1 percent at a 95 percent confidence interval.

About PenFed Credit Union
Established in 1935 as the War Department Credit Union, Pentagon Federal Credit Union (PenFed) is America's second-largest federal credit union, serving 1.7 million members worldwide with over $24 billion in assets. Our mission is to help members reach their financial potential. PenFed Credit Union offers market-leading mortgages, automobile loans, credit cards, student loans, checking, certificates, and a wide range of other financial services with members' interests always in mind. We have a proud history of serving those in the Armed Forces, Department of Defense, Department of Homeland Security, Military Associations, eligible veterans and retirees, and their families. You may also qualify through membership in select organizations within our field of membership. PenFed Credit Union is federally insured by the NCUA and is an Equal Housing Lender. To learn more about PenFed Credit Union, visit PenFed.org, like us on Facebook and follow us @PenFed on Twitter. Interested in working for PenFed? Check us out on LinkedIn. We are proud to be an Equal Employment Opportunity Employer.

SOURCE PenFed Credit Union