Research of the Week: Why Do We Rent?
Obviously, some do it because they want to, others because they have to. But the numbers might shock you.
Each week, Consolidated Credit searches for financial research that can help you deal with your debt and budget. This week…
The interesting study
If you rent an apartment, you’ve probably wondered: How many of my neighbors really want to be here?
For most of the previous century, renting was seen as temporary for young people – a step toward homeownership. That’s not as true in this century, according to a scientific survey of more than 2,000 adults commissioned by Bankrate, the nation’s largest personal finance research firm.
The big results
“Almost half of non-homeowners say their financial situation stands in their way of purchasing a home,” Bankrate says. The breakdown: 29 percent can’t afford the hefty down payment, while 16 percent say their credit “isn’t good enough to qualify for a mortgage.”
While these renters would love to own a home, many are renting because they don’t want to buy a home: “35 percent say they don’t own because they just don’t want to be homeowners yet,” Bankrate says.
Interestingly, Bankrate muses that the Great Recession explains both groups. Obviously, the first group can’t afford to buy a home, but the second group may seek greater mobility so they can follow where the scarce lucrative jobs are.
“A lot of people went through some deep pains in the past 10 years or less,” one mortgage executive told Bankrate. “All of those things are traumatic in your life.”
The fascinating details
While 44 percent of millennials – between the ages of 18 and 29 – say “they don’t want to own yet,” 29 percent of those over 50 say the same thing.
Bankrate doesn’t hypothesize why that is, but Consolidated Credit president Gary Herman wonders…
“In my two decades as a credit counselor, I’ve seen medical crises devastate older Americans. Many are forced to sell their assets to cover not only the medical bills but the lost income that results. I’ve also seen divorce destroy the finances of both spouses. It’s possible these are factors in Bankrate’s results.”
What you can do
Most curious in the Bankrate survey was this result: “Almost a quarter of non-owners report they don’t have a clue how much they would put down to buy a home.” It seems many renters who consider home ownership don’t realize how to research the topic.
Bankrate’s suggestion? “The solution to misinformation about the home-buying process is to reach out to a nonprofit housing counseling agency.”
These agencies off free, in-depth advice on your unique situation, from homebuyer education to mortgage assistance programs. One of the best-known and highest-rated programs is Consolidated Credit’s Housing Counseling program. If one of the nation’s many renters who wants to own someday – or even sooner than that – call for details.