Young Renters Say They Want to Own, But ...

Most young renters think owning is a more sensible housing choice for financial reasons, according to Fannie Mae’s new National Housing Survey. Seventy-six percent of young renters, surveyed in this study, between 18 and 39 years old, think owning makes more sense because they’re protected against rent increases, and owning can be a good investment in the long-run.

“However, a large majority of young renters have remained pessimistic over the last few years about their ability to get a mortgage; in contrast, younger owners have grown more optimistic,” says Sarah Shahdad, strategic planning analyst at Fannie Mae. “Demographic differences between younger renters and younger owners may explain part of the gap in attitudes.”

Young owners are more likely to fall in the higher end of the age range, earn more, and be employed full-time compared with younger renters, Shahdad notes. While young renters would like to own, we are becoming aware that many young renters continue to rent longer due to their financial capability and preparation.

Young renters consider down payments and credit scores to be the top obstacles of getting a mortgage. Also, the presence of student loans heightens the difficulty, they feel. The majority of younger renters are reported to have insufficient assets to cover a 5 percent down payment plus closing costs on a typical starter home, Shahdad notes.

But, young renters say, one day, they still plan to buy.

By educating renters about their housing choices, and showing them the steps they need to start taking control of their finances, renters will be able to make more informed decisions and begin managing their finances in order to fulfill their goal of home ownership sooner rather than later. 

If you currently rent and are looking to speak to a real estate professional about home ownership, Keller Williams Realty Cary, opened in 2003 has 176 agents who specialize in residential, luxury and commercial properties. Call Team Leader, Bill Middleton today at: 919-882-3229.

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