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 | Mar 24, 2019
New York’s largest office-to-condo conversion nearing completion
One Wall Street will feature 100,000 sf of amenities and a three-level Whole Foods.
Multifamily Housing | Mar 18, 2019
New luxury multifamily development set to bring 254 units to the Maryland suburbs
Dwell Design Studios is designing the project.
Multifamily Housing | Mar 15, 2019
Portland’s new affordable housing development includes units for families transitioning out of homelessness
Salazar Architect is designing the building.
Building Tech | Mar 13, 2019
Almost everything you wanted to know about industrial construction
Our experts offer 15 tips on how best to perform factory-based construction.
Multifamily Housing | Mar 11, 2019
Kaiser Permanente takes aim at reducing chronic homelessness
Initiatives include a multimillion-dollar investment fund, and collaborating with a group that works with communities to house the unsheltered.
Multifamily Housing | Mar 6, 2019
MLK Plaza brings 167 units of affordable housing to the Bronx
The project was financed by the City’s ELLA program.
Multifamily Housing | Feb 26, 2019
275-unit residential building under construction at 2111 S. Wabash
Solomon Cordwell Buenz is designing the project.
Hotel Facilities | Feb 4, 2019
31-story YotelPAD Miami combines 222 hotel rooms and 231 condominiums
YotelPAD is a new brand by Yotel.
Multifamily Housing | Jan 31, 2019
Student housing series: Designing a home away from home in The Golden State
California asserts building code restrictions more stringently than other states, making design challenging for student housing.