Many Americans believe the dream of homeownership is out of reach, but a Bankrate study reveals that at least some of that dissatisfaction may be due to misconceptions that make homeownership seem more difficult than it actually is.
A poll conducted earlier this year found that 41% of American adults think now is a “bad time” to buy a home, and 26% say they will “never” buy their dream home. It also revealed that many people have disproportionately high barriers to getting a mortgage, such as not-so-great credit scores.
Here are the most common myths uncovered in our research and how they stack up to reality.
Myth: You need excellent credit to get a mortgage
According to the survey, 39% of Americans believe homebuyers need “excellent” credit to get a mortgage. While it’s true that good credit can help you qualify for the best deals, it’s still possible to get a mortgage with a credit score below 700.
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What is “excellent” credit and “good” credit?
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According to Equifax, a credit score of 800 or higher is considered “excellent.” “Very good” means 740-799, which is still pretty trustworthy. A credit score between 670 and 739 is considered “good,” while 580 and 669 is considered “fair.”
In fact, borrowers with credit scores as low as 620 can qualify for Federal Housing Administration (FHA) loans, but requirements for loans through the U.S. Department of Veterans Affairs (VA) can be as low as 580.
“People with credit scores of 620 or higher are eligible for many of our first-time homebuyer programs,” said Scott Linder, senior vice president at TD Bank.
Borrowers with lower credit scores will pay more. FHA and VA loans have higher fees than conventional loans. However, you can still qualify for a mortgage with a score well below the excellent range.
read more: How to buy a house with bad credit
Myth: You need 20% down.
With home prices still at record levels, many prospective buyers are pessimistic about their ability to afford down payments and closing costs. According to a Bankrate survey, 39% believe buyers should have a 20% down payment.
While a 20% down payment can certainly help you qualify for the best combination of mortgage rates and fees, many people can qualify for a mortgage with a down payment of less than 20%. FHA loans require a 3.5% reduction, while VA loans do not. You can also get a conventional loan with a down payment of less than 20%, but then you’ll have to pay private mortgage insurance (PMI).
That’s good news because the typical home price nationwide is about $400,000, and most first-time buyers don’t have $80,000 for a down payment.
Brad Case, chief housing economist at Homes.com, said Americans may know they can qualify for a loan with a down payment of less than 20% but think it’s unwise.
“Everyone interprets the question differently,” he says. “Probably 19% of them think it’s a must, and the other 20% think you shouldn’t buy below 20%. You’re taking out the biggest loan you’ll ever take out, and it’s for 30 years. So you’re taking on a lot of risk.”
Myth: Owning is cheaper than renting.
Unlike the other two myths, this last myth exemplifies a common misconception about financing a home purchase and says less about the barriers to homeownership.
The survey found that only 18% of American adults agreed that renting is cheaper than owning a home, even though this is the norm in most parts of the country. According to Realtor.com’s March rental report, renting is more affordable than buying in all 50 of the largest U.S. metropolitan areas, saving you an average of $920 per month compared to buying.
In some places, the gap can be very large. According to Bankrate data, in Northern California you’ll spend about $6,000 more per month renting than owning. Only two metropolitan areas have calculations that come close. In Detroit, the average rent was $1,481 and the average home ownership cost was $1,515 last year. In Pittsburgh, the typical rent was $1,452 per month and the typical cost of home ownership was $1,601.
That doesn’t mean homeownership isn’t a valid goal. You can also think of the savings from renting as an opportunity to put towards a purchase tomorrow. “Save-conscious renters have a real opportunity to save for a down payment faster than they think,” says Daniel Hale, chief economist at Realtor.com.
One reason to buy a home is that, according to Realtor.com, households that buy their first home before age 30 have a 22.5% increase in net worth by midlife compared to households that buy until their 40s. This aligns with the well-worn concept that renting means you’re throwing money away every month, while owning is more like paying for it yourself.
methodology
The survey was conducted on the SSRS Opinion Panel Omnibus platform. The SSRS Opinion Panel Omnibus is a twice-monthly national probability-based survey. Data collection was conducted from January 16 to January 20, 2026, with a sample of 1,007 respondents. The survey was conducted in English via the web (n=977) and telephone (n=30). The margin of error across respondents is +/-3.5 percentage points at a 95% confidence level. All SSRS Opinion Panel omnibus data is weighted to represent the target population of U.S. adults ages 18 and older.