Finance a Home Purchase: How Investments are Made in 2023

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Home purchases in 2023 have seen significant changes in how individuals finance their dream homes. With advancements in technology and shifting economic trends, prospective buyers have access to a wide range of options and investment strategies to finance a home purchase. In this article, we will explore the latest trends in house purchases and delve into the various methods individuals are employing to finance their homeownership dreams.

Financing Options for Finance a Home Purchase

When it comes to financing a home purchase in 2023, prospective buyers have a plethora of options at their disposal. The most popular and widely utilized method is obtaining a mortgage loan from a financial institution. Mortgages enable buyers to purchase a property by borrowing a portion of the total cost and repaying it over an extended period, usually 15 to 30 years. This approach allows individuals to spread out the cost of homeownership, making more affordable and manageable to finance a home purchase.

Down Payments and Funding Sources

Down payments play a crucial role in the home-buying process, and the source of these funds can vary significantly among different generations. According to the National Association of REALTORS®, 47 percent of buyers in 2023 relied on their savings to make the down payment. This highlights the importance of diligent saving habits and financial planning for those aspiring to purchase a home. 

Moreover, 38 percent of buyers used the proceeds from the sale of their primary residence to fund their down payment. This option is especially popular among older homeowners who are downsizing or relocating. Additionally, equity from a previous home is often leveraged by more experienced buyers to facilitate the purchase of a new property. 

However, it is essential to note the disparities across generations. The study reveals that 57 percent of Older Millennials and 64 percent of Younger Millennials used their savings for the down payment, while only 28 percent of the Silent Generation did the same. Younger Millennials also turned to gifts or loans from friends and family more frequently than any other generation.

Overcoming the Down Payment Challenge

For many homebuyers, saving for a down payment remains a significant hurdle. The National Association of REALTORS® highlights that 13 percent of all buyers cited saving for a down payment as the most difficult step in the home-buying process. This challenge is particularly pronounced among Younger Millennials, with 28 percent of them struggling to accumulate sufficient funds. In contrast, Older Baby Boomers encountered this obstacle at a mere two percent. 

To overcome the down payment challenge, it is crucial for potential buyers to adopt a disciplined saving strategy well in advance. Implementing a budget, reducing unnecessary expenses, and exploring assistance programs specifically designed to aid homebuyers can greatly alleviate the burden of saving for a down payment.

Student Loan Debt and Home Purchases

In 2023, the issue of student loan debt continues to affect homebuyers, particularly younger generations. The National Association of REALTORS® reveals that 19 percent of all buyers reported having student loan debt, with a median amount of $35,000. Younger Millennials carry the highest share of student debt at 35 percent, with a median amount of $30,000. 

Conversely, Older Baby Boomers are less likely to have student debt, with only three percent reporting such obligations. However, it is worth noting that among the different generations, Older Millennials shoulder the highest student loan balances, with a median amount of $40,000. The presence of student loan debt can significantly impact a buyer’s financial standing and influence their ability to secure favorable mortgage terms and finance a home purchase.

Conventional Loans and Financing Preferences

When it comes to the type of loan used for financing a home purchase, conventional loans continue to dominate the market. A considerable 62 percent of all buyers in 2023 opted for conventional financing options. Conventional loans are mortgages offered by private lenders that are not backed by the government. 

Interestingly, there is a generational discrepancy in the preference for conventional loans. While 60 percent of Younger Millennials chose this route, a higher percentage of 70 percent of older Baby Boomers relied on conventional financing. This divergence in financing choices reflects the varying needs, preferences, and financial situations of different age groups.

Homeownership as an Investment

Despite the changing landscape of real estate and evolving financing options, homeownership remains widely regarded as a sound investment. According to the National Association of REALTORS®, 88 percent of all buyers in 2023 viewed a home purchase as a good investment. This sentiment is particularly strong among Gen Xers, with 89 percent believing that owning a home is a good financial investment. 


As we navigate the year 2023, home purchases continue to be made using various financing strategies. The availability of mortgage loans, coupled with a multitude of down payment options, empowers prospective buyers to achieve their homeownership dreams. While challenges such as saving for a down payment and managing student loan debt persist, individuals across generations remain optimistic about homeownership as a fruitful investment. By staying informed, exploring different financing avenues, and planning strategically, aspiring homeowners can navigate the evolving real estate landscape and turn their dreams of homeownership into a tangible reality.

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Viviana Grisales

Marketing Specialist

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