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 | Oct 25, 2016
The Beacon will become the most sustainable residential tower in the world
Lumiere Developments says the building will generate enough energy to offer residents ‘Free Energy For Life.’
High-rise Construction | Sep 8, 2016
Construction on the tallest residential tower in western Europe could start early next year
China’s Greenland Group is the developer of four of the world’s 10 largest skyscrapers
High-rise Construction | Sep 6, 2016
Peddle Thorp Architects' solar-powered Melbourne high-rise looks to go off the grid
The skyscraper would be the first in Australia to incorporate solar cells in its façade.
Multifamily Housing | Aug 17, 2016
A new research platform launches for a data-deprived multifamily sector
The list of leading developers, owners, and property managers that are funding the NMHC Research Foundation speaks to the information gap it hopes to fill.
Multifamily Housing | Aug 12, 2016
Apartment completions in largest metros on pace to increase by 50% in 2016
Texas is leading this multifamily construction boom, according to latest RENTCafé estimates.
Regulations | Aug 9, 2016
New trend eases parking requirements for U.S. cities
Transit-oriented development and affordable housing are spurring the movement.
Multifamily Housing | Aug 9, 2016
Surge Homes brings the concept of micro condos to Houston
The sub-500-sf homes will be the first of their kind to be offered in the metro known as Space City
| Aug 4, 2016
MULTIFAMILY BUILDING GIANTS: Rental complexes focus on affordability, accessibility, and specialty amenities
To address the affordability problem and attract tenants, owners and developers are experimenting with smaller and smaller units, amenity-rich environments, and “co-living” concepts.
| Aug 4, 2016
Top 50 Multifamily Engineering Firms
Jacobs, AECOM, and Arup top Building Design+Construction’s annual ranking of the nation’s largest multifamily building sector engineering and E/A firms, as reported in the 2016 Giants 300 Report.
| Aug 4, 2016
Top 80 Multifamily Construction Firms
Lendlease, Suffolk Construction Co., and Clark Group top Building Design+Construction’s annual ranking of the nation’s largest multifamily building sector construction and construction management firms, as reported in the 2016 Giants 300 Report.