While rents have been rising, renters aren’t suffering as much financially as they were over the past few years, making these renters ideal for homebuying.
According to a new TransUnion Study, renters in the middle of 2016 were more credit-active and lower-risk than renters 6 years ago.
“Comparing renters from the immediate post-recession period to renters of today highlighted an interesting dynamic,” said Ezra Becker, senior vice president of research and consulting for TransUnion. “While renters in 2009 were facing a difficult economic environment, renters today also face challenges because of rising rental prices. Yet significant economic changes have occurred between 2009 and 2016, with a net benefit to renters. Today’s renters are generally lower risk and more credit active in the 12 months following their move, taking on more auto loans and credit cards than previous renter cohorts.”
More than half of renters’ have an aggregate excess payment, which is their ability to afford more payments with money left to spend, of $100 or more.
With renters being more financially stable, chances are that a percentage will look to become homeowners in 2017. According to MGIC, in 2016, the median age of a first-time homebuyer rose to 32 this year. From 2011 to 2015, the median age was 31, so homebuyers are waiting slightly longer than in past years.
More than one-third (35 percent) of homebuyers are first-time homebuyers, a 3 percent increase from last year. Twenty-four percent of first-time homebuyers are using a gift as part of their down payment.
Seventy-four percent rented before deciding to buy, while 21 percent lived with parents, relatives or roommates.
Of all first-time homebuyers, 58 percent are married couples, 18 percent are single females, 14 percent are unmarried couples and 8 percent are unmarried males.