79% of Affordable Housing Demand Driven by Low-Income Families: HomeFirst Finance
A new report by HomeFirst Finance reveals that 79% of India’s affordable housing demand comes from low-income households, highlighting the positive impacts of homeownership on mental well-being, financial discipline, and quality of life.
Affordable HousingLowincome FamiliesHomefirst FinanceHomeownershipFinancial StabilityReal Estate NewsJul 01, 2025
India’s urban centers are projected to require over 31 million affordable homes by 2030. However, many low-income households, often informally employed, face barriers such as lack of documentation, irregular incomes, and limited credit history. Despite these challenges, the report found that homeownership has become a powerful tool for long-term stability and social upliftment.
More than half (51%) of the surveyed families reported improved mental well-being and emotional stability after purchasing a home. Families cited relief from the stress of rent hikes, evictions, and frequent relocations. For many, homeownership offered a stable environment to raise children and deepen community connections. One respondent shared that her son now studies better in their new home, free from the noise and distractions that plagued their previous rented accommodation.
Post-homeownership, 57% of respondents improved their credit scores and repayment discipline. Nearly 48% opted for top-up loans—mostly to furnish or renovate their homes—while 24% made voluntary part-payments to reduce interest burden or loan tenure. Though income levels largely remained unchanged, 35% of families saw an increase in savings, and 32% invested more in their children’s education, particularly in school tuition and private coaching.
The study found that families in Tier 2 cities experienced stronger financial outcomes compared to those in Tier 1 cities. About 50% of Tier 2 households reported an increase in income and 56% in savings, benefiting from lower cost of living and local employment opportunities. In contrast, urban households faced higher financial pressure due to mortgage burdens and elevated living costs.
Nearly half (49%) of the women surveyed reported a greater sense of emotional security post-homeownership. While many played supportive roles in decision-making, co-earning women in nuclear households often influenced housing choices and financial decisions. In female-headed households, homeownership provided both dignity and control. Women reported higher involvement in managing finances and planning for their children’s future.
The report categorized respondents into professional cohorts—formal, informal, and self-employed. Self-employed families showed the highest stability (63%) and used homeownership as a base for small businesses. Informal workers benefited from better neighborhoods and access to healthcare, though many struggled with EMI pressure due to irregular income.
The report also found that homeownership enabled families to aspire beyond survival—towards vehicle purchases, business expansion, and long-term investments. Many households transitioned up one income bracket within 7–8 years of homeownership. "Owning a home is not just about shelter. It reshapes aspirations, builds financial resilience, and gives low-income families a sense of permanence and pride," the report noted.
Frequently Asked Questions
What percentage of affordable housing demand comes from low-income families?
79% of India’s affordable housing demand comes from households in the Economically Weaker Section (EWS) and Lower Income Group (LIG).
How does homeownership impact mental well-being and emotional stability?
More than half (51%) of the surveyed families reported improved mental well-being and emotional stability after purchasing a home, citing relief from the stress of rent hikes, evictions, and frequent relocations.
What financial benefits do homeownership bring to low-income families?
Post-homeownership, 57% of respondents improved their credit scores and repayment discipline. Nearly 48% opted for top-up loans to furnish or renovate their homes, while 35% of families saw an increase in savings.
What are the differences in financial outcomes between Tier 1 and Tier 2 cities?
Families in Tier 2 cities experienced stronger financial outcomes, with about 50% reporting an increase in income and 56% in savings, benefiting from lower cost of living and local employment opportunities.
How does homeownership impact women's sense of security and financial involvement?
Nearly half (49%) of the women surveyed reported a greater sense of emotional security post-homeownership. Women in nuclear households often played supportive roles in decision-making and financial management.
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