Owning a home is often considered a cornerstone of the American dream, symbolizing stability, independence, and a sense of accomplishment. But despite the widespread aspiration for homeownership, many Americans lack the necessary knowledge of basic concepts integral to this dream.
At Lombardo Homes, our passion lies in transforming our customers’ dreams into tangible reality. We are dedicated to collaborating closely with them, crafting homes that seamlessly harmonize with their unique lifestyles. In a new study, we highlight the gaps in knowledge of many Americans when it comes to home-buying, renovating, and building.
From misconceptions about mortgage terms to unfamiliarity with home maintenance essentials, the study reveals the need for accessible and comprehensive education to empower individuals on their path to realizing the American dream.
As for America’s knowledge about homeownership, there’s also some room for improvement. We asked 25 multiple-choice questions related to being a homeowner and used their responses to calculate a grade percentage on an A-F academic scale. To answer a question correctly, more than 50% of respondents had to select the right answer on the quiz. Unfortunately, America has some studying to do as it only scored 14 questions right and ultimately failed the quiz.
America received its best marks in the home buying section, answering 7 out of 10 questions correctly. America knows the purpose of a pre-approval letter, what home equity is, the current interest rate for a 30-year mortgage, and who traditionally pays the real estate agent’s commission on a home sale. But quiz takers underestimated how much it costs to buy a home in 2023. According to the Federal Reserve Bank, the median home sales price in the first quarter of 2023 was $436,800. Only 24% answered that correctly.
The worst scores came from the section about home renovating and maintenance, with only 3 out of 7 questions answered correctly. While America did know what HOA stands for (Homeowners Association), and the average lifespan of a standard asphalt shingle roof (20 years), respondents didn’t know how long a traditional tank-type water heater should last (8-12 years), or the name of the material typically installed directly over the exterior wall framing of a house (sheathing).
America did slightly better in the section about home building, answering 4 out of 8 questions correctly, proving knowledge of what a home appraisal is, that a home warranty provides coverage for home appliances, and what closing costs are. However, America didn’t know what a “punch list” is or the minimum clearance between a kitchen countertop and overhead cabinets (18 inches). Respondents also underestimated the average cost to build a new home in 2023 (without the cost of land). According to Real Estate Witch, it costs $446,000 to build a home from scratch this year. Only 27% answered that question correctly.
We also broke down quiz results by age to give a grade for each generation.
It may come as no surprise that Baby boomers did the best on the quiz, but that doesn’t mean they scored well. Baby boomers answered 16 questions correctly, and received an overall score of a “D.” Baby boomers knew the most about home buying, but didn’t know how much it costs to build a new home in 2023.
Gen X failed the quiz, answering only 14 questions correctly. Gen X scored the best on questions about home buying (answering 7 out of 10 questions correctly) but struggled with questions about home renovation and building.
Millennials scored slightly better than Gen X on the quiz, answering 15 out of 25 questions correctly. Millennials also struggled with questions about home renovating and building and received an overall score of a “D.” This generation didn’t know the minimum clearance between a kitchen countertop and overhead cabinets (18 inches).
While this generation likely has the least amount of homeowners, Gen Z failed the homeowner quiz miserably with the lowest score (answering 10 out of 25 questions correctly). Gen Z was the only generation to score less than 50% in the home buying section and scored less than the other demographics in the sections on home renovating and building. Gen Z didn’t know who traditionally pays the real estate agent’s commission on a home sale (seller), what coverage is not usually in a standard homeowner’s insurance policy (flood protection), and why you would need private mortgage insurance (when a home buyer doesn’t have a 20% down payment).
The results of the homeowner quiz show America’s collective knowledge of homeownership has room for improvement. That’s why we are committed to providing people the resources they need to become confident on their journey to owning their dream homes.
Methodology
In May 2023, we surveyed 806 Americans about their homeownership knowledge. We asked respondents 25 multiple-choice questions about the home buying, renovating, and building processes. To answer a question correctly, more than 50% of respondents had to select the right answer on the quiz. We used their responses to calculate a grade percentage on an A-F academic scale (A 90–100%, B 80–89%, C 70–79%, D 60–69%, F 0–59%).
Age demographic breakdowns are as follows: Baby Boomers (59 to 77), Generation X (43 to 58), millennials (27 to 42), and Generation Z (18 to 26). Respondents were 50% male, 49% female, and 1% non-binary. Respondents ranged in age from 19 to 76 with an average age of 45 years old.
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