Will more renters start buying?

According to a recent survey, more renters are looking into home ownership, and if the economy keeps improving, housing sales may get a boost. Freddie Mac recently released “Perceptions of Renting and Homeownership,” a survey of more than 2,000 U.S. adults.

There were a few big differences between the renters and buyers surveyed. For example, of those polled who rent their houses, 45 percent responded they have just enough money to get by, and 17 percent do not have enough money for basics, such as food and housing, until the next payday. In comparison, of those polled who own their home, 31 percent say they have just enough to get by, and seven percent do not have enough for basics until their next payday.

Among renters surveyed, 78 percent agreed that they preferred renting because it provides freedom from home maintenance responsibilities, while 68 percent agreed it allows more flexibility over where you live. Two-thirds agreed that renting protects against home price declines.

However, some renters do find favorable factors about home owning, with 91 percent agreeing it is something of which to be proud, and 90 percent liking that a home can be passed down to children. Thirdly, 89 percent agreed that it allows more flexibility to design it the way you want.

Of the renters, 39 percent expect to purchase a home in the next three years, with the remaining 61 percent planning to continue to rent. Of those planning to purchase, younger renters outnumber older numbers, with 47 percent of responders aged 25-34, and 58 percent of renters aged 35-44 planning to buy, with only 27 percent for people 45-64 years old and 21 percent of those 65 or older.

However, of those renting who plan to continue renting, most cite financial issues for not buying a home. Fifty percent believe they cannot afford a down payment, 38 percent believe they cannot afford a mortgage and 31 percent cite poor credit history for not purchasing a home.

On the other hand, some people just prefer renting, whether they don’t want the responsibilities of home ownership (39 percent) or they feel that buying a home in this market is not a wise investment.

Have you seen more renters begin looking to own?