CHERRY HILL, N.J. – Oct. 21, 2015 – Many renters are considering a shift to homeownership soon as rents continue to rise.
According to a survey released by TD Bank, 50 percent of consumers currently renting are likely to purchase a home within the next two years – and many have already taken steps toward homeownership, such as saving for a downpayment.
The TD Bank Renter Survey polled more than 1,000 Americans currently renting apartments or homes, asking how they feel about homeownership, what concerns might be keeping them out of the housing market and what factors motivate them to consider home purchases.
The findings reveal that higher rents are directly connected to consideration of homeownership.
The renting landscape
- According to the survey, the breaking point where renters say they would contemplate buying a home is when rent rises over $1,100, and their average current rent is close to $1,000 per month.
- Over half of respondents have had a significant rent increase, with average rents increasing by nearly $300 over the past two years.
- 51% of respondents said money is their main concern, and that they have not saved enough money or they have too much debt to buy a home right now.
- 48% of respondents cite concerns about the affordability of mortgage payments.
- The two biggest motivators cited for purchasing a home include rising rents and the desire to build equity.
"Rising rents are motivating Americans to purchase a home," said Scott Haymore of Pricing and Secondary Markets. "With an improving job market and economy, renters are gaining more confidence in the housing market and starting to explore homeownership as a feasible option."
Purchasing the American dream
- 59% of consumers said it's extremely or very important to own a home.
- Millennials place even higher importance on homeownership, with 76 percent rating homeownership extremely or very important to them.
"We can see from our data that rents are rising, and while many renters feel that saving for a home is out of reach, there are other options they should consider," said Haymore. "Today, potential buyers can take advantage of state and government affordability programs, which offer options outside the traditional 20 percent downpayment. This enables them to pursue homeownership, build equity and still feel comfortable with their monthly payments."
TD Bank offers more information about the TD Bank Renter Survey on its website.
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Reprinted with permission. Florida Realtors®. All rights reserved.