Renters’ Views of Homeownership
With mortgage rates at a historic low, more and more people have been taking advantage of this post 2008-crash golden era. People are buying homes and oddly enough the group leading the charge is millennials.
But just because more and more people are making the investment in a home, it doesn’t mean that there aren’t just as many renters. So what is it from a renter’s perspective that keeps them renting and not buying?
Freddie Mac conducted a Harris Poll back in August of 2014 of over 2,000 adults in the U.S. to get a take on what keeps renters renting. And as you can probably suspect, there are a lot of factors.
Money is a driving force for renters and factors heavily into the prospect of homeownership. In fact many renters claim that they live paycheck to paycheck with 45% saying they have just enough money to get by. While only 38% of homeowners indicated that they were in a similar position. Another way to look at it: Less than half (38%) of renters are comfortable, meaning they have extra money to spend on things they want, while 62% of homeowners have extra money every paycheck.
Another major selling point of renting over owning is the ability to move somewhere else once your lease ends, and along with that flexibility, renters like the idea of having less responsibilities. According to the survey, 78% of people agreed that renting provides freedom from home maintenance responsibilities.
In addition over half of the people polled also agreed that renting allows for more options of where you live, and that rent is more affordable than owning when you want to be in, or close to a major city like Chicago.
However renters are also aware that when you rent you are subject to a landlord, and that renting feels like throwing money away.
This isn’t to say that renters don’t see the merits in being a homeowner. Renters who were polled actually tended to agree more with positive statements about owning a home than they did for renting. Over 90% believe that owning a home is something to be proud of, and something you can pass on to your children.
Furthermore most of renters polled believe that owning a home or condo provides protection against rent increases, gives you more control, is a sign of success, and is an investment opportunity to build long-term wealth.
Many renters also plan to own a home in the next three years, according to the survey. Younger renters between the ages of 18 – 34 are actually more likely to purchase than the generation before them. And while a lot of the younger generation is renting now, largely due to financial constraints, they believe that within a few years they’ll have the down payment and monthly income to afford the purchase of their first home.