Mortgage News - 70% Of Renters Not Buying This Year

70% Of Renters Not Buying This Year

Mortgage News June 23, 2023

Despite expectations of an economic slowdown leading to lower home prices and relief for potential buyers, the reality is different. For those prioritizing affordability, the median home prices increased by 2.5% in April 2023 compared to the previous year, following the record-high prices of 2022.

Analysts, including the National Association of Realtors, predict that prices will continue to rise throughout the year. This scarcity of affordable homes is compounded by a significant number of renters, who would normally be interested in purchasing a home, choosing to remain on the sidelines. A survey by Avail reveals that less than one-third of renters are considering buying a house within the next year, leaving approximately 70% of renters uninterested in homeownership.

High home prices intimidate younger Americans. A Zillow survey found that 52% of Gen Z and 57% of millennials without homes feel they’d need a lottery win to afford one. Zillow reports the worst housing affordability crisis in 15 years. Home values rose by 3% in the past year, with double-digit increases during the pandemic peak.

Rising interest rates and home value appreciation increased the average mortgage payment by $431 monthly. Around 40% of millennials would need multiple jobs to afford a home, and 28% of Gen Z would change careers. Achieving homeownership requires significant lifestyle adjustments for most young Americans.

To purchase an average U.S. home, saving approximately $67,000 for a 20% down payment is necessary for the present climate.

However, there is some positive news for renters according to the Avail survey. It reveals that fewer independent landlords intend to increase rent prices in the coming year compared to previous surveys. Around 65.1% of surveyed landlords stated their plans to raise rent at one or more of their properties within the next 12 months. This figure has decreased from 70.4% reported in October 2022.

The reasons given by landlords for this shift include maintaining strong relationships with current tenants and avoiding turnover.

Need a loan officer list, real estate agent list, insurance agent list, investment advisor list or contractor list in your area? Contact Jennifer Swanson at 260-223-9203 or Jennifer@SpecialtyContactDatabases.com

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70% Of Renters Not Buying This Year

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