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96% Of Americans Make Homeownership Harder Than Necessary – Do You?

February 20, 2023 6-minute read

Author: Victoria Araj


Buying a home has long been a key part of the American dream. Not only does homeownership provide financial benefits, but it can also offer the emotional benefit of having a place to call your own. Since 1960, homeownership rates have stayed above 60% and varied little.1 Even today, homeownership rates are between 62% – 70%, on par with rates from the ‘60s.2

Still, aspiring homeowners face several hurdles. About 1 in 5 Americans (23%) cited current market conditions as a preventative factor to homeownership. However, down payment and closing costs, as well as credit history and score, are about as likely to keep people from purchasing a home as current market conditions, with 22% and 20% of respondents citing these issues, respectively. 

Market conditions may be challenging, but it turns out that other major preventative factors to homeownership aren’t as limiting as most think. 

We surveyed 3,177 Americans and found: 

  • About two-thirds of Americans believe you need a higher credit score than what is actually necessary.
  • Down payment costs are 3 – 6 times more affordable than most Americans think.
  • Nearly half of Americans believe myths about mortgage qualification that may add unnecessary hurdles to homeownership. 

So, if you’re an aspiring homeowner, here’s the good news: Getting a mortgage probably isn’t as hard as you think!  

Table Of Contents

    47% Of Americans Believe You Need A Good Or Great Credit Score When You Only Need Fair

    What credit score do you need to qualify for a traditional mortgage? Nearly half of Americans believe you need a good or great score of 670 or above, but the truth is you only need a fair score of 620.

    • Men generally have a slightly more accurate guess than women of what credit score is needed to qualify.
      • Men guessed a median fair score of 650.
      • Women guessed a median good score of 670.

    • Current renters or those looking for a home generally have a slightly more accurate view than current or past homeowners of what credit score is needed to qualify.
      • Current or past homeowners guessed a median good score of 670.
      • Current renters or those looking for a home guessed a median fair score of 650.

    • Both those with above-average and below-average incomes generally believe you need a fair score, guessing a median score of 650.

    • A small percentage of Americans (3%), appear entirely unsure about what credit score is needed to qualify for a traditional mortgage, guessing a credit score over 850, which doesn’t exist.

    Not only do nearly half of Americans incorrectly believe you need a good or great credit score, but nearly two-thirds believe you need a higher score than necessary. Just over 66% of respondents guessed a score between 621 – 850. 

    A pie graph shows the breakdown of what down payment Americans believe is needed for a conventional loan.

    This false belief may also unnecessarily prevent prospective buyers from becoming homeowners. About 1 out of 5 survey respondents marked credit history or credit score as a determining factor in why they aren’t purchasing a new home. But since necessary credit scores are actually lower than what 66% of Americans believe, homeownership could actually be easier than they think.  

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    Down Payments Are Significantly Less Expensive Than Most Americans Believe

    Down payments are another factor preventing Americans from purchasing a new home. Combined with closing costs, down payments are a preventative factor for homeownership cited by over one-fifth of Americans.

    But down payments are significantly less expensive than most Americans believe. About two-thirds of respondents (61%) believe you need between a 10% – 20% down payment when you actually only need 3% on a conventional mortgage. This means down payment costs are between 3 – 6 times more affordable than most Americans believe.

    The 20% down payment myth comes from mortgage insurance requirements. While you only need a 3% down payment to qualify on a conventional loan, 20% is needed to avoid paying private mortgage insurance (PMI). While there’s confusion over what down payment is necessary to qualify for a conventional loan, about half of Americans (45%) were aware of down payment requirements to avoid PMI. 

    • Even current or past homeowners have confusion about what down payment is necessary, with only 12% accurately guessing the minimum 3%. Over 8 out of 10 current or past homeowners believe you need a down payment that’s higher than necessary.

    • Overall, slightly more homeowners (82%) overestimate down payment costs than non-homeowners (76%).

    • About the same number of men and women (12% and 13%, respectively) have an accurate guess of what down payment is actually necessary.

    • Men (83%) are about as likely as women (80%) to overestimate down payment costs.

    A pie graph shows the breakdown of what down payment Americans believe is needed for a conventional loan.

    Overall, only about 1 in 10 Americans have an accurate estimate of what down payment costs are needed for a conventional mortgage, and down payment costs are significantly less expensive than 81% believe.

    Only 3% Of Americans Have An Accurate View Of What Factors Affect Mortgage Qualification

    Do you know what factors affect your ability to qualify for a traditional mortgage? If not, you’re not alone. We asked survey respondents to identify these factors in our recent survey, and only 3% of respondents could do so accurately.

    Here’s what Americans do know about qualifying for a mortgage: 

    • Most (73%) know credit scores will have an effect.
    • Most (69%) know income will have an effect.
    • Most (58%) know down payment size will have an effect.
    • Most (52%) know their debt-to-income ratio (DTI) will have an effect.
    • Most (51%) know employment history will have an effect.
    • Nearly half (46%) know mortgage history will have an effect. 

    The above factors are the only ones that will certainly affect your ability to qualify for a mortgage. Different lenders will have different qualifications – for example, some may allow schooling to count toward employment history. But, generally, the above factors are what matter.

    In our survey, only 3% correctly marked all of the above qualifying factors.

    Nearly Half Of People Believe Mortgage Qualification Myths That May Add Hurdles To Homeownership

    Do you believe any of these mortgage qualification myths? When given a choice of multiple factors and asked which impact qualifying for a mortgage, nearly half of Americans incorrectly thought the below factors would affect qualification. The percentage of respondents who marked each option is set in parentheses .

    • Age (29%)
    • References (22%)
    • Education level (13%)

    Whether you’re applying for a mortgage at 18 or 48 doesn’t matter, and neither does your bachelor’s degree (or lack thereof). Believing these mortgage qualification myths could add unnecessary hurdles to homeownership.

    A bar graph shows how many people believe in common mortgage qualification myths.

    All that matters to lenders is your ability to repay the loan, which is why they look at the financial stability factors listed in the previous section.

    Wait – Does Family Debt Impact My Approval Ability?

    Family debt and credit history only impact your ability to qualify for a mortgage if that family member is an applicant on the loan. 41% of survey respondents believe their spouse's debt will impact the ability to get a loan approved. However, your spouse's debt and credit history will only affect your mortgage approval if they are an applicant on the loan.

    Getting A Mortgage May Be Easier Than 96% Of Americans Think

    Based on our recent survey, 96% of respondents believed at least one of the myths we covered, possibly making homeownership seem more difficult than it is. If you’re hoping to buy a home, here is what you’ll need to qualify for a conventional mortgage in most cases: 

    • A credit score of 620 or higher
    • A down payment equaling 3% or higher of the home’s purchase price
    • A steady employment or mortgage history
    • A DTI ratio of 50% or less

    A visual summary of what myths may be making homeownership seem harder than necessary in Americans’ minds, as well as the four things you actually need to qualify.

    The above requirements are for conventional loans. Different types of home loans will have different requirements.


    Our survey sampled 3,177 people from the general population on the Toluna platform. Respondents represented about a one-third split between the following age groups: 23 – 40; 41 – 56; 57 – 62. Those who have never gotten a mortgage and don’t intent to get one in the future were screened from the survey and are not represented in the 3,177 sample size.


    If you’re an aspiring homeowner, the first step is learning about your options. See what today’s rates are, learn mortgage terminology and create a plan to find your future home.


    1. Edge

    2. U.S. Census

    Victoria Araj

    Victoria Araj is a Section Editor for Rocket Mortgage and held roles in mortgage banking, public relations and more in her 15+ years with the company. She holds a bachelor’s degree in journalism with an emphasis in political science from Michigan State University, and a master’s degree in public administration from the University of Michigan.