Confusion about rates, down payments, and home financing driving hesitation among buyers
A large majority of Americans continue to view homeownership as a key life milestone, but rising anxieties around affordability and mortgage misconceptions reveal an urgent need for better homebuying education, according to new survey findings from KB Home.
In its second annual national survey, conducted by The Harris Poll, KB Home found that 83% of Americans still see owning a home as a major life goal, a figure unchanged from 2024. However, 89% reported feeling anxious about the process, with affordability concerns, financial stress, and a lack of knowledge fueling buyer hesitation.
“This year’s survey shows that the dream of owning a home is still very real, even if many people are unsure how to get there,” said Rob McGibney, president and chief operating officer of KB Home.
Excitement (47%), pride (43%), and motivation (28%) topped the list of positive feelings people associate with buying a home. But for many, the emotional high is tempered by stress: 27% of respondents said they felt nervous about the process, while 24% reported feeling stressed. Among current renters, anxiety levels were even higher, 93% said they felt anxious about homebuying.
The top reasons Americans want to own a home include greater safety and security (47%), more space (47%), access to outdoor areas like backyards (43%), avoiding rent hikes (42%), and long-term financial improvement (41%).
Buyers also prioritize home quality and features. Nearly 80% said they wouldn’t sacrifice items such as a limited home warranty (87%), energy-efficient utilities (86%), or a modern floor plan (83%), even with a fixed budget.
Homeownership is still a goal, but cost remains a critical barrier. 44% said affording a home is their biggest concern, followed by taking on more debt (41%) and unexpected repair costs (30%). Many also questioned whether now is a good time to buy (28%) and worried about settling for a home they don’t love (23%).
More than half (54%) of respondents felt that today’s buyers face worse conditions than their parents did. The top reasons cited were higher home prices (46%), elevated mortgage rates (38%), and economic uncertainty (36%).
Read next: Homebuying demand grows despite highest mortgage rates since January
Matt Vernon, head of consumer lending at Bank of America, noted that while there’s optimism, many buyers are still on pause.
“A majority of buyers feel the market is headed in the right direction, but many are still planning to wait for more favorable conditions before they decide to take action,” he said.
The survey uncovered major knowledge gaps that could be holding prospective buyers back.
Sixty-nine percent (69%) mistakenly believe mortgage rates are at an all-time high or are unsure. In fact, rates peaked in 1981 at 18.6%, far above today’s average of 6.8%.
Many lack understanding of key mortgage terms, with 44% unsure about APR and 49% unclear on PMI.
Only 37% knew a 20% down payment isn’t required, and just 25% were aware that a mortgage is possible with a credit score in the 500s.
This confusion is especially prominent among younger buyers. About a quarter of Gen Z (25%) and Millennials (23%) said they didn’t know where to start with the homebuying process, and nearly one in five in both groups said not having a trustworthy source for advice made them anxious.
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