Debunking the Top 5 Homebuying Misconceptions
Along with anticipation and excitement, the homebuying journey often comes with misconceptions that make the process seem more daunting, expensive or exclusive than it actually is.
“When buyers have the facts, they approach homeownership with confidence and clarity,” says Abby Hauke, board chair for the Greater Milwaukee Association of REALTORS® (GMAR). “Rather than feeling discouraged by misconceptions they explore realistic options and take informed steps toward buying a home.”
Misconception 1: Buyers Need a 20% Down Payment
One of the most enduring myths in real estate is the belief that purchasing a home requires a hefty 20% down payment. In actuality, statistics from the National Association of REALTORS® (NAR) show that in 2024, first-time buyers put an average of just 7% down.
“While putting down 20% may help avoid private mortgage insurance (PMI) and reduce monthly payments, it’s by no means a universal standard,” says Tom McCormick broker/owner with EXIT Realty Horizons. “Many loan programs allow for much lower down payments.”
FHA loans, VA loans for veterans and USDA loans for rural properties all feature minimal down payment requirements with some as low as 3%, especially for first-time buyers. REALTORS® can help buyers research available programs and calculate what works best for their financial situation.
Misconception 2. Renting Always Costs Less Than Owning
Renting seems cheaper, but this perception overlooks market fluctuations such as dramatic rent increases. In addition, while renting may, in some cases, result in lower upfront costs, homeownership offers long-term financial benefits. Over time, homeowners build equity, while renters see their payments rise without gaining ownership. Homeownership also offers tax advantages.
Many mortgage payments don’t differ much from the cost of rent. According to Zillow’s 2025 Housing Analysis, the median monthly mortgage payment for a starter home was $1,620 compared to the average rent of $1,590 in major metropolitan areas.
Myth 3. Perfect Credit Is Mandatory for a Mortgage
Many buyers assume they need flawless credit to qualify. According to research from Experian, lenders actually approve applicants with credit scores as low as 620 for conventional loans and 580 for FHA-backed mortgages. The Mortgage Bankers Association found similar results in their first quarter of 2025 review. They found that 34% of mortgage approvals went to borrowers with scores under 700.
“While a higher score may yield better interest rates and terms, imperfect credit does not automatically disqualify a buyer,” says McCormick. “Moreover, lenders also evaluate income, employment history and debt-to-income ratios, making the picture more nuanced than a simple credit score threshold.”
Misconception 4. The Homebuying Process Is Too Complicated
The perception that homebuying is overwhelmingly complex and stressful discourages many potential buyers who feel unprepared to navigate the process on their own. However, the NAR found that 73% of first-time buyers said their agents and online resources made the process manageable.
“Many people worry unnecessarily about paperwork, negotiations and unfamiliar legal and financial steps,” adds Hauke. “A REALTOR’s primary role is to help buyers by providing expertise, resources, and support throughout the homebuying process.”
REALTORS® make the homebuying process more transparent and less daunting by researching available programs, guiding buyers through market conditions and utilizing modern technology to streamline applications, document uploads, and communication.
Myth 5. The Housing Market Is Too Volatile to Buy
Some potential homebuyers think market changeability, such as limited inventory and rising prices, could lead to bad investments. But data from CoreLogic shows that U.S. home values rose by 6% on average between January 2024 and June 2025, with experts predicting continued favorable growth.
“Waiting for a ‘perfect’ market rarely aligns with personal timelines,” says Hauke. “Even in competitive markets, buyers can find opportunity—by expanding their search area, considering different property types or being flexible with their wish list. With proper preparation and the guidance of an experienced REALTOR®, navigating a fluctuating market can still lead to a successful purchase.”
Understanding the facts associated with homebuying instead of relying on common misconceptions gives potential homebuyers the power to access opportunities, make confident choices and achieve the home of their dreams.
The REALTOR® Advantage
A REALTOR® is a member of the National Association of REALTORS®, is committed to a Code of Ethics and has the expertise to find the right home for everyone. Look for the “R” to determine if your agent is a REALTOR®.
Locally, the Greater Milwaukee Association of REALTORS® is a 5,500-member strong professional organization dedicated to providing information, services and products to help REALTOR® help their clients buy and sell real estate. Visit gmar.com for more information.