Not all renters are trying to become homeowners. A majority of them don't think they'll ever have enough money to buy property, recent data finds.
In fact, 66% of U.S. renters say rising home prices have them feeling "hopeless" about owning a home, according to a survey by online brokerage Home Bay of 1,000 renters. Instead, they're focusing on other financial milestones.
With median home prices up 33% since January 2020, 77% of renters say the U.S. has an affordable housing crisis. The median home price climbed from $329,000 in January 2020 to $476,800 as of April 2023, according to the most recent U.S. Census Bureau data.
While 51% of renters consider owning a home to be a "very important" financial milestone, survey respondents were more likely to select other achievements as priorities. Here are the most popular milestones they chose:
- Being debt-free: 71% of respondents
- Having a comfortable retirement: 66% of respondents
- Owning a car: 59% of respondents
Some respondents aren't interested in homebuying at all, with just over a third saying they would rather spend money elsewhere.
"With homeownership comes repair and maintenance, property taxes and homeowners insurance, all of which come with a price and reduce your freedom," says Michelle Gessner, a certified financial planner in Houston. "Being debt-free, having a comfortable retirement and owning a car directly correlate to a higher quality of life and financial freedom."
When renters selected reasons for not owning a home, the three most popular were related to cost:
- Can't afford one in general: 78% of respondents.
- Can't afford a down payment: 72% of respondents.
- High interest rates: 71% of respondents.
Rising housing costs are an issue in the rental market too, as nearly 1 in 4 renters say they currently spend 50% or more of their income on rent. That's far more than the target 30% of total income financial experts typically recommend putting toward housing.
On the flip side, many renters who want to own a home would go to extremes to buy one, the survey found: 31% of renters would sell their plasma and 29% would skip meals if it meant they could afford a home. More commonly, over two-thirds say they'd take on a second job to make home ownership a reality.
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