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 | Dec 4, 2019
9 tips on creating places of respite and reflection
We talked to six veteran landscape architects about how to incorporate gardens and quiet spaces into multifamily communities.
| Nov 20, 2019
ClosetMaid to celebrate 55 years in business at the 2020 NAHB International Builders Show
Company to celebrate 55 years in storage and organization with a visit by celebrity guest Anthony Carrino.
Multifamily Housing | Nov 20, 2019
Over 400 micro units spread across two communities under development in Austin
Transwestern is developing the projects.
Multifamily Housing | Nov 14, 2019
U.S. multifamily market stays strong into 4th quarter 2019
October performance sets a record amid rising political pressure to cap rent growth, reports Yardi Matrix.
Multifamily Housing | Nov 8, 2019
The Peloton Wars, Part III - More alternatives for apartment building owners
ProForm Studio Bike Pro review.
Multifamily Housing | Nov 7, 2019
Multifamily construction market remains strong heading into 2020
Fewer than one in 10 AEC firms doing multifamily work reported a decrease in proposal activity in Q3 2019, according to a PSMJ report.
| Nov 6, 2019
Solomon Cordwell Buenz opens Seattle office, headed by Nolan Sit
National design firm brings residential high-rise expertise to the Pacific Northwest
| Nov 6, 2019
Passive House senior high-rise uses structural thermal breaks to insulate steel penetrations
Built to International Passive House standards, the Corona Senior Residence in Queens, N.Y., prevents thermal bridging between interior and exterior steel structures by insulating canopies and rooftop supports where they penetrate the building envelope.