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For all the hurdles to homeownership, one obstacle is stubbornly more insurmountable than the rest: the down payment.

Renters are having trouble stacking up the savings to place a down payment on a home, according to the recently released Zillow® Housing Aspirations Report (ZHAR). Seventy percent of renters surveyed in the report say the down payment is more of a hindrance than debt (cited by 50 percent of those surveyed), job security (38.5 percent) and qualifying for a mortgage (53.2 percent)—though those aspects are barriers, as well. Low supply was a roadblock for just 11.2 percent of those surveyed.

“With home values close to record highs, it’s no surprise renters are concerned about coming up with enough money to buy a home,” says Dr. Svenja Gudell, chief economist at Zillow. “Rising rents are also a factor—it’s extremely difficult to save when you’re paying record-high rents.”

The irony? The difficulty of coming up with a down payment is keeping most renters from saving money as a homeowner. In 33 of the 35 major metropolitan areas, a monthly mortgage is less expensive than monthly rent.

Though renters have low down payment options, the long-term savings gained with 20 percent down—a general standard—often outweigh those earned upfront.

“While it is possible to put down as little as 3 percent on a home, the trade-off is a higher interest rate and costly private mortgage insurance—a financial trade-off that may make sense for some buyers,” Gudell says.

Renters, still, have not lost sight of their homeownership goals. Sixty-three percent of those surveyed are “confident” in their ability to afford a home “someday;” 25 percent have a more definitive timeline, planning to buy a home in the next three to five years. Twenty-two percent of millennial renters, markedly, plan to buy a home in the next one to two years. Only 2 percent of millennial renters plan on never buying a home.

Importantly, 66 percent of those surveyed equate owning a home with the American Dream.

For more information, please visit www.zillow.com.

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