Boston Area Homeownership Dream Fading Away

The dream of Boston Area homeownership seems to be fading in lieu of making sure there is enough to retire on.The dream of Boston area homeownership appears to be fading, according to a recent poll by Harris Poll conducted on behalf of the the National Endowment for Financial Education (NEFE).

50 percent of American adults say their top financial goal is having enough money for retirement. In fact, the percentage of people who cite having enough money for retirement as their top financial goal is on the rise since the recession. In 2011, when NEFE asked American adults the same question, 47 percent said having enough money for retirement was their top financial goal.

In 2011, 17 percent said homeownership was their most-important financial goal, compared to just 13 percent in the latest findings.

Biggest Barrier to Boston Area Homeownership

There are barriers that limit people from reaching their goals, with 63 percent citing the inability to save enough as an obstacle (compared to 70 percent in 2011) and 47 percent stating that managing debt is a hindrance (compared to 54 percent in 2011).

In addition to not having enough cash for a down payment, tighter credit standards are keeping many first-time buyers out of Boston area homeownership.

According to the National Association of Realtors, the average accepted credit score on conventional mortgages is about 720. A credit score that would have gotten you a mortgage before 2008 is now below the average rejection score. The problem is overly restrictive mortgage lending standards, relying on arbitrarily high credit scores. Although this appears to be easing back somewhat, scores still must be considerably higher today for a borrower to realize the dream of Boston area homeownership.

Besides the affordability of Boston area homeownership, the thing that is attracting new investors and first time buyers into the home buying market are steadily increasing rents. Strong rental growth is happening in both the single-family market and the multifamily apartment market. Average U.S. rents are predicted to continue increasing at a rate of about 4% annually for some years to come although the inflation rate currently stands at 2.9%.

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