The most recent Federal Reserve analysis was carried out last October and found only modest improvements with regards to economic well-being, but respondents were increasingly optimistic about the future.
The Survey of Household Economics and Decision-making was first carried out in 2013 and forms part of the Federal Reserve’s key report on household wealth. This particular report is focused on housing and found that whereas 74% of homeowners’ report they are living comfortably, just 48% of renters felt the same way. Some 10% of those surveyed were still living with their parents while 5% were living with a roommate. The report looked at the motivation for renting a home and the challenges associated with buying a property.
Some 81% of renters said they would prefer to own a property, and 50% said they lacked the finances to afford a down payment. Another 31% of renters felt they could not qualify for a mortgage. The report noted other reasons for renting as 27% of those renters thought it was cheaper for their household and 25% for renting was more convenient. Just 12% preferred renting and 9% of those currently renting a property are actively looking to buy somewhere.
Not surprisingly, income greatly reflected the reasons for renting. Amongst renters earning less than $40,000 a year, 35% said they were unable to qualify for a mortgage and 52% said they could not save up for a down payment. The results amongst renters earning more than $100,000 a year were quite different as 39% thought renting a property was more convenient and 17% preferred renting somewhere to owning. Some 29% planned on moving in the near future.
The differences between attitudes were also reflected in the renters’ ages. Amongst those aged between 18 and 29, 36% planned on moving soon while 13% were looking to buy. Amongst renters aged 60 or over, 26% preferred renting to home ownership and 35% found it cheaper to rent.
The article in eyeonhousing.org also highlighted other key factors of this report. These included the fact that most homeowners had a median tenure of 12 years. Amongst homeowners 44% said owning a property allowed them to build home equity and 20% liked the certainty involved with the costs of owning a home. Some 67% of homeowners preferred earning a property for financial reasons and 72% simply preferred to own their own home, while 43% like the fact that there are fewer rules associated with home owning and a greater ability to customize their residence. Another 23% didn’t like moving. Just 6% thought their home would lose value over the next 12 months.