The conventional wisdom about renters is that most of them would prefer to own their homes, and that many eventually will buy a house.
However, a survey of more than 25,000 adults—about one-third renters, two-thirds homeowners—found the renters to be more burdened by debt than homeowners and severely short of emergency savings. For many renters, a 20% down payment to secure a mortgage is a pipe dream; for some, even the government’s recent plan to bring back mortgages with 3% down payments might be a bridge too far.
The Financial Industry Regulatory Authority (FINRA), a nonprofit oversight organization authorized by Congress, conducted the study in 2012, and released its results last October.
For more on the multifamily housing sector, read BD+C's Special Report: "5 intriguing trends to track in the multifamily housing game"
In 2012, 36% of Americans were renters. The survey found them to be younger than homeowners; only 39% were married, compared to 63% of owners. Nearly three-fourths of renters (74%) had household incomes below $50,000, compared with 41% of owners.
The survey found renters to be less educated, and nearly twice as likely to be unemployed or temporarily laid off, than owners. Forty-two percent of renters are minorities, compared with 29% of owners.
About one in four renters (24%) said they found it “very difficult” to pay their bills, versus 12% of owners. Nearly half of renters (48%) said paying their bills was “somewhat difficult,” compared to 39% of homeowners.
Renters are burdened by a surfeit of debt. The survey found that renters were nine percentage points more likely than homeowners to carry credit card debt and nine percentage points more likely to carry student debt.
The difference was even more drastic for medical debt: 17 percentage points. (At the time the survey was taken, 68% of the renters said they had medical coverage, versus 85% of homeowners, but this was before the Affordable Care Act took effect.)
The scariest finding was that renters had practically no savings and live from paycheck to paycheck. Fifty-eight percent said they probably or definitely couldn’t come up with $2,000 in 30 days to cover an unexpected expense, compared to 29% of homeowners. Only 22% of renters (versus 50% of owners) said they had enough savings to cover three months’ expenses.
Related Stories
Multifamily Housing | May 27, 2015
‘European’ living comes to The Woodlands with its first condo tower
Treviso at Waterway Square will offer a dynamic downtown setting with numerous live/work/play options.
Multifamily Housing | May 19, 2015
Zaha Hadid unveils 'interlocking lattice' design for luxury apartments in Monterrey, Mexico
Hadid's scheme was inspired by the Mexican tradition of interlocking lattice geometries.
Multifamily Housing | May 19, 2015
Study: Urban land use policies costs U.S. economy $1.6 trillion a year
The research contends that more affordable housing options can help cities generate significantly more income.
Multifamily Housing | May 17, 2015
New York City runs into affordable housing dilemma
New York City’s affordable housing policy has created attractive low-cost housing, but the price of success has been high.
Sponsored | Coatings | May 14, 2015
Prismatic coatings accent the new Altara Center
This multi-use campus will contain a university, sports facilities, medical center, and world-class shopping
High-rise Construction | May 6, 2015
Two new designs submitted for New York City Riverside Center
Both designs reference the cantilevers and other elements featured in architect Christian de Portzamparc’s original masterplan for the complex, which has now been scrapped.
High-rise Construction | May 6, 2015
Parks in the sky? Subterranean bike paths? Meet the livable city, designed in 3D
Today’s great cities must be resilient—and open—to many things, including the influx of humanity, writes Gensler co-CEO Andy Cohen.
Mixed-Use | May 5, 2015
Miami ‘innovation district’ will have 6.5 million sf of dense, walkable space
Designing a neighborhood from the ground-up, developers aim to create a dense, walkable district that fulfills what is lacking from Miami’s current auto-dependent layout.
Codes and Standards | May 1, 2015
Colorado House kills construction defects bill
The legislation would have made it harder for condo owners to sue builders.
Multifamily Housing | May 1, 2015
Trade groups extend campaign to promote apartment living
The groups claim that there are more than 37 million Americans—12% of the population—living in just under 20 million apartment units nationwide. Apartments and their residents contribute $1.3 trillion annually to the economy.