June kicks off National Homeownership Month. Unfortunately, it’s not quite the same as National Donut or Pancake Day. No one is giving away free houses. But as the market gears up for peak summer homebuying season, it’s the perfect time to remind potential buyers that there are plenty of ways homeownership is attainable for them.
President Bill Clinton first introduced National Homeownership Week as a means to boost homeownership across America. National Homeownership Month became an official Presidential Proclamation in 2002, and since then it has had support from presidents on both sides of the political aisle.
NHM has become a time to recognize the benefits of homeownership, such as the important role it can play in building generational wealth and housing security for individuals and families. For real estate agents, it also highlights the ongoing need to address the challenges and barriers that exist in order to make homeownership more affordable and accessible.
Persistent challenges to homeownership
More than two decades after National Homeownership Month was first introduced, barriers to homeownership remain, however. The U.S. homeownership rate declined to 65.7% at the end of 2023 due largely to the combined effect of higher mortgage costs and more limited for-sale inventory, according to the U.S. Census Bureau. The homeownership rate is now 3.5% lower than the peak of 69.2% in 2004 and 70 basis points below the 25-year average rate of 66.4%.1
In addition, many Americans have become discouraged with the process and have the perception that homeownership is out of their reach. Findings from a recent Redfin survey show that:2
- Affordability is believed to be the number-one barrier to homeownership for young Americans.
- Nearly one of every five (18%) millennials and 12% of Gen Zers who replied to the recent housing survey believe they will never own a home.
- Of the Gen Zers and millennials who are planning to buy soon, about 2 in 5 are working side jobs to afford their down payment.
Making homebuying a reality
According to the National Association of Realtors, April through June is the busiest time of the year for homebuying.3 As many real estate agents know firsthand, potential homebuyers that are reading the headlines about affordability can become discouraged from even exploring the possibility of buying a home in the current market. National Homeownershp Month is an ideal time to remind people that the American dream of homeownership can be a reality.
Federal agencies such as HUD and FHA, along with state and local housing agencies, are offering new resources and tools that expand homeownership opportunities for first-time homebuyers, especially low- and moderate-income households and communities of color. Last year, for example, the FHA made it easier for first-time homebuyers to qualify for mortgage financing by allowing underwriters to take into account positive rental history to determine creditworthiness.4
Working with a good mortgage loan officer (MLO) can make a big difference in giving potential buyers confidence that homeownership is within their reach. A knowledgeable and attentive MLO can help real estate agents with four key components:
- Education
- Qualifying potential applicants
- Helping to connect qualified applicants with down payment assistance programs and low and zero downpayment loans
- Successfully executing on mortgages
Connecting homebuyers with the best options
Every client situation is unique, and it is important to connect homebuyers with the best mortgage option that fits their circumstances. A young married couple with two incomes and student loan debt who are trying to buy their first home are going to have very different mortgage needs than a single mom with a part-time job and child support.
U.S. Bank mortgage loan officers are here to educate real estate agents on buyers’ various options, regardless of their situation, that can help them achieve their homeownership goals.
In addition to conventional mortgage products, experienced MLOs can assist buyers who have little cash or savings find available options, including low or even zero down payment loans that allow a buyer to finance 100% of their purchase price.
FHA loans
Federal Housing Administration (FHA) loans are government-backed loans that offer consistent rates, low down payment requirements and flexible qualification guidelines. They also tend to have lower credit and down payment requirements for qualified homebuyers.
VA loans
Backed by the Department of Veterans Affairs, these loans feature low or no down payment options, no mortgage insurance requirement and flexible qualification guidelines. To be eligible for a VA loan, the buyer must be an active-duty service member, a veteran or an eligible surviving spouse.
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