CHARLOTTE N.C., Oct. 20, 2021
/PRNewswire/ -- New data from Bank of America shows that family
support often plays a pivotal role in helping first-generation
homebuyers reach the major milestone of purchasing their first
home. Families of first-generation homeowners often instilled in
them the dream to buy a home and an understanding of the value of
owning – whether they were able to provide financial support, or
simply motivation.
"For many first-generation homeowners and their families,
homeownership has a unique importance, given the collective efforts
to overcome financial challenges that can often span generations,"
said AJ Barkley, Head of Neighborhood and Community Lending at Bank
of America. "Achieving this goal can create a sense of pride and
accomplishment that resonates both for the buyer and those closest
to them, including their parents and future generations."
Published today, Bank of America's 2021 Homebuyer Insights
Report: First-Generation Homeowner Spotlight is based on a
survey of U.S. adults who currently own a home or plan to in the
future. The study found:
- Seven out of 10 first-generation homeowners (69%) say the
importance of homeownership has increased over the past year.
- 61% of first-generation homeowners say the importance of
building equity has increased, compared to 39% of
non-first-generation homeowners (meaning those whose parents or
grandparents owned a home).
- 73% of first-generation homeowners also have a newfound
appreciation for the safety and security that homeownership
provides, compared to 60% of non-first-generation homeowners.
- Twice as many first-generation homeowners (43%) bought a home
because they felt their parents expected it, compared to
non-first-generation homeowners (20%).
- For some, family involvement goes even further, with 37% of
first-generation homeowners saying they received financial
assistance from their parents to buy a home.
- 74% of first-generation homeowners and 57% of
non-first-generation homeowners expect to buy another home in the
future.
Sheena C. is a first-generation homeowner and Philadelphia native who moved to Detroit several years ago. "I view
homeownership not only as a way to build generational wealth for me
and my young daughter, but to also have a stake in a neighborhood,"
said Sheena. "I immediately connected to the vibrant
community in Detroit and decided
to put down roots."
The path to homeownership begins with saving and building
credit
Homeownership remains one of the most common methods for
families and individuals to build wealth, as homes historically
appreciate over time1. When the home increases in value,
so does the amount of equity that is available to the homeowner. It
is this equity that can be used to support the next generation.
However, the path to homeownership begins long before searching
for a home. "The journey toward homeownership – whatever your
timeline – actually begins with your first banking experience and
continues as you learn to budget, save and establish a solid credit
history," said Barkley. "Building financial confidence takes time
and requires making early, consistent and informed decisions that
set you up for success."
Prospective homebuyers say saving for a home is a financial
priority, but they face hurdles, much like the generations before
them. Only 24% of prospective buyers are proud of their credit
score and 89% say they know there's more they could do to save
money.
Overcoming barriers through planning and assistance
"While homeownership may feel like a distant dream, knowing the
stepping stones and solidly planting one foot in front of the next
can put you closer to your goal," says Barkley.
Bank of America is helping people get on the right path with a
range of solutions starting with help managing spending and saving
patterns and practicing responsible credit behavior. The bank
offers innovative low down payment mortgages, as well as down
payment and closing cost grants (no repayment required) designed to
make homeownership accessible and affordable for those with a
healthy financial picture.
While many prospective buyers can afford monthly mortgage
payments, they report high rent costs (57%) and expensive home
prices (54%) are making it harder to save for the upfront costs of
homeownership. That's why Bank of America's Community Homeownership
Commitment® was created – to address the challenges many would-be
buyers face. Already, the Community Homeownership Commitment has
provided over $270 million in grants
to more than 29,000 homebuyers.
Sheena, the Detroit homeowner,
is just one of many who took advantage of Bank of America's Down
Payment Grant and America's Home Grant® to close on a home earlier
this year. "After hours of research to understand the home buying
process, things just aligned when I applied and qualified for down
payment assistance from Bank of America," she said. "I knew that
help with upfront costs would enable me to replace rent payments
with regular mortgage payments, giving me a stronger sense of
stability that a month-to-month lease could not offer."
About Bank of America's Community Homeownership
Commitment
First launched in 2019 as a $5
billion initiative and tripled this year to a $15 billion commitment through 2025, the Bank of
America Community Homeownership Commitment® helps low- and
moderate-income homebuyers across the country begin to build their
personal wealth and family legacy through the power of
homeownership.
With one of the most generous grants in the industry, Bank of
America offers up to $17,500 in
combined down payment and closing costs grants. Bank of America
grants may also be joined with externally provided home buying
assistance.
- Down Payment Grant program helps buyers overcome the
biggest barrier to homeownership – down payment. In more than 260
cities and counties across the country eligible buyers can receive
3% of the home's purchase price up to $10,000, whichever is less, to be used toward
their down payment. No repayment is required.
- America's Home Grant® program offers a lender credit of
up to $7,500 that eligible buyers can
use towards non-recurring closing costs, like title insurance and
recording fees, or to permanently buy down the interest rate. The
funds do not require repayment and can be combined with funds from
the Down Payment grant program listed above.
About Bank of America's Homebuyer Insights
Sparks
Research conducted a national online survey on behalf of Bank of
America between February 18 and March 1,
2021. Sparks surveyed a national sample of 2,000 adults ages
18+ who currently own a home or plan to in the future. In addition,
an augment of 185 surveys was conducted to oversample First
Generation homeowner populations (363 surveys in total). The margin
of error for the national quota is +/- 2.2 percent at the 95
percent confidence level. Select questions allowed respondents to
choose more than one answer, resulting in responses that may equate
to more than 100 percent.
Bank of America
Bank of America is one of the world's
leading financial institutions, serving individual consumers, small
and middle-market businesses and large corporations with a full
range of banking, investing, asset management and other financial
and risk management products and services. The company provides
unmatched convenience in the United
States, serving approximately 66 million consumer and small
business clients with approximately 4,200 retail financial centers,
approximately 17,000 ATMs, and award-winning digital banking with
approximately 41 million active users, including approximately 32
million mobile users. Bank of America is a global leader in wealth
management, corporate and investment banking and trading across a
broad range of asset classes, serving corporations, governments,
institutions and individuals around the world. Bank of America
offers industry-leading support to approximately 3 million small
business households through a suite of innovative, easy-to-use
online products and services. The company serves clients through
operations across the United
States, its territories and approximately 35 countries. Bank
of America Corporation stock (NYSE: BAC) is listed on the New York
Stock Exchange.
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Reporters May Contact:
Susan Atran, Bank of America,
646.599.3300
susan.atran@bofa.com
1 Joint Center for Housing Studies of
Harvard University: Learning from the
History of the Homeownership Rate
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SOURCE Bank of America Corporation