Many potential homebuyers may be putting off their purchase due to a lack of accurate knowledge about the state of the market and their ability to enter it.
A new survey from online mortgage lender and FDIC-insured bank Laurel Road asked college-educated Americans about their homebuying plans.
It found that many predict another housing crash within five years; a fifth think it will happen in the next 12 months.
The poll found many misconceptions about the housing market and arranging a mortgage, with down payments, interest rates, and affordability all weighing on potential buyers.
"Purchasing a home is a life-changing decision, yet despite the range of resources, people often aren't aware of the personalized options available to fit their specific situation," said Alyssa Schaefer, Chief Marketing Officer of Laurel Road.
Where buyers are getting it wrong
The survey found that almost half of respondents are unaware of alterative down payment options, believing that 20% is barrier to their homeownership dreams.
A third of all respondents and 46% of millennials believe they cannot afford a 20% down payment.
There is also a misconception about interest rates with many thinking they will hit 6% by year-end, well above the 4.6% forecast by the Mortgage Bankers Association.
When will they buy?
Americans estimate they will buy a home in the next six years, on average.
First-time buyers plan to buy in two years on average (when their average age will be 36) and 62% of those who are concerned about affordability are currently looking or plan to buy in less than five years, compared to 33% of those who aren't concerned.
Among those who have ever bought (or plan to buy) a home, 85% have plans for their equity if they refinanced their mortgage: 48% would put it into savings; 41% would pay off debt, such as credit cards or student loans; 27% would remodel their home.
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