Freddie Mac: More Than Half of Renters Plan to Keep Renting
Freddie Mac, McLean, Va., commissioned an online survey of renters showing nearly three-fourths of respondents believe renting is a more affordable choice than homeownership, with more than half plan to continue renting in the next three years.
The Harris Poll survey of 4,063 adults, conducted in January and February, showed consistency across all major age demographics, with 70 percent of Millennials, 61 percent of Gen Xers and 73 percent of Baby Boomers thinking that renting is a more affordable choice. Together, 70 percent of renters said renting was more affordable than homeownership and 55 percent said they plan to continue renting for the next several years.
“Renting is becoming a popular choice among many age groups,” said David Brickman, executive vice president of Freddie Mac Multifamily. “While most renters still have favorable views toward homeownership and aspire to it, many choose to rent because they view it as more affordable and a better fit for their lifestyle right now.”
Forty-six percent of quarterly survey respondents said renting is a good choice for them now regardless of whether they plan to buy or believe they will be able to afford to do so. The perception is even more positive among Millennials, with 54 percent saying renting is a good choice for now.
The survey noted, however, that homeownership is very much in the future of many renters. It said renters of single-family homes are the most likely home buyer, with 52 percent stating they plan to purchase a home in the next three years, compared to 36 percent of apartment renters. Older Millennials (age 25-34) are the group most likely to become homeowners (56 percent), followed by Gen Xers (49 percent), younger Millennials age 18-24 (44 percent) and Baby Boomers (31 percent).
Many renters who plan to buy in the next three years still indicate they have financial hurdles to overcome, including:
–Affording a down payment (36 percent)
–Not a good enough credit history (35 percent)
–Not making enough money (30 percent)
–Carrying too much debt (23 percent)
The survey also noted, however, that renters continue to indicate their choice to rent is influenced by more than just financial reasons, that lifestyle preferences also are a factor:
–The most popular reason for younger Millennials is that renting allows them to save money (42 percent), followed by it being their best option for their lifestyle and age (39 percent).
–Gen Xers top reason is that renting gives them freedom from home maintenance (28 percent), followed by not wanting the responsibilities of owning a home (24 percent).
–Four in 10 Baby Boomers say they rent because they do not want to worry about home maintenance (41 percent), do not want the responsibilities of owning a home (37 percent) and renting is the best option for their lifestyle and age (37 percent).
The survey said many renters also reported they do not intend to move even if their rent has increased.
The Mortgage Bankers Association will hold a Single-Family Rental Finance Workshop on Thursday, April 7 in Washington, D.C. The Workshop is the dedicated finance forum for those already involved in single-family rental, as well as those interested in how this new mortgage origination product fits within their firm.
An agenda can be accessed at https://www.mba.org/assets/Documents/Research/Draft Agenda1.pdf. To register, click https://www.mba.org/store/events/conferences-and-meetings/single-family-rental-finance-workshop?utm_source=Informz&utm_medium=Email&utm_campaign=mba.org.
