An analysis released by Fannie Mae on May 6 reports the opinions of younger renters regarding homeownership. Younger renters are defined as those between the ages of 18 and 39. The vast majority of younger renters (85%) aspire to own a home, but face financial constraints.
Seventy-six percent of younger renters find homeownership appealing because it would protect them from potential rent increases, and because they view ownership as a good long-term investment. Fifty-nine percent think owning is a more sensible housing choice than renting.
However, 74% of younger renters thought it would be difficult for them to obtain a home mortgage. The most commonly cited obstacles to obtaining a mortgage were an insufficient credit score (53%) and difficulty affording down payment costs (50%). Sixty-three percent responded that they did not have sufficient assets to afford a 5% down payment plus closing costs for the typical “starter” home.
Fannie Mae analysts recommend providing young renters with information about budgeting, saving for a down payment, and assessing whether homeownership makes sense.
The analysis focuses on a sample of 596 younger renters from the third quarter of 2013 responses to Fannie Mae’s monthly phone survey of adults, the National Housing Survey.
“What Young Renters Want and the Financial Constraints They See” is available from Fannie Mae at: http://bit.ly/1lwQwUv