Only 39% Of Renters Think Saving For Down Payment Is A Priority

Posted by Patrick Barnard on November 19, 2015 No Comments
Categories : Residential Mortgage

There is more bad news for mortgage lenders: A recent survey conducted by Freddie Mac reveals that only 39% of renters in the U.S. think saving for a down payment for a home is a priority.

The survey shows how hard it's become for renters to survive – many are now cutting back on essentials and some are considering getting roommates in order to offset recent rent increases due to ever increasing demand.

The survey of 2,020 adults – of which 703 were renters – in October reveals that 66% of renters carry some form of debt each month. More importantly, it shows that renters are putting other priorities above saving for a down payment: About 59% of renters say they prioritize saving money for an emergency or unexpected expense; 51% for retirement; and 50% for their children's education – well above the number who are prioritizing saving for a down payment.

At the same time, the survey reveals that the majority of renters (56%) are optimistic about managing their debt. It also shows that Gen Xers are more likely than Millennials or Baby Boomers to buy a home in the next three years.

‘We know rents are rising faster than incomes and now we have data to show that many renters don't have enough to pay all their debts each month, which is forcing them to make tradeoffs, such as cutting spending on other items,’ says David Brickman, executive vice president of multifamily for Freddie Mac, in a statement. ‘Despite this, some renters feel optimistic about managing their debt.’

‘Growth in the renter segment will most likely occur through multifamily properties as more than half of those currently renting single-family properties are planning to become homeowners in the near future,’ Brickman adds. ‘The data shows single-family renters are increasingly more dissatisfied than multifamily renters.’

To read the full report, click here.

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