Why so many renters aren’t buying homes yet
There is a simple reason why so many renters aren’t buying into the proverbial American Dream of owning a home: They don’t want to.
More than third of non-homeowners surveyed by Bankrate said they don’t want to buy a place, or at least not yet.
The survey found that Americans with higher education and those earning more than $50,000 a year were the most likely to delay buying a home, along with Millennials. Even so, only 4 percent of those surveyed said they never planned on owning a home. Other recent studies that have similarly found that Millennials haven’t sworn off buying a home altogether but feel that financial pressures are preventing them from doing so in the near future.
“It’s not surprising that a lot of Millennials aren’t interested in home ownership yet. Renting allows them more freedom to move,” said Holden Lewis, Bankrate’s senior mortgage analyst.
Middle-aged Americans also say it’s not the lack of desire but rather the lack of means keeping them from homeownership. More than half said they don’t have enough for a down payment or they don’t have a good enough credit score to qualify for a home loan, according to the survey.
Three in 10 Hispanics — the group least likely to want to remain renters — reported that their credit was an obstacle to homeownership, the highest level among all demographic groups.
Credit isn’t a problem for those 65 and older. About a quarter in that age group couldn’t afford a down payment, while another 30 percent said they don’t want to own a home yet. Nearly four in 10 seniors offered other reasons for not owning a home, such as health factors, inability to keep up with home maintenance, financial restraints or living in a home for seniors.
Overall, non-homeowners are aiming high for their down-payment plans. More than a third expect to put between 6 percent and 20 percent of the purchase price as a down payment. Thirteen percent plan to contribute 5 percent or less, while a fifth intend to pay more than the traditional 20 percent down.