Three recent surveys have revealed that financial and personal circumstances lead many Americans to favour renting a property over buying one. The tendency towards more single households, the perceived barrier to mortgage loans and the flexibility afforded by a rental all point towards continued buoyancy in this sector of the US property market.
In a government survey on marital status, some 124.6 million Americans described themselves as single. This figure represents over half the American population for the first time since government records began. This tendency has wide ranging implications for several sectors including the US property market. For example, singles are more likely to rent a home than buy one. The rise in the number of non-married Americans explains in part the recent surge in demand for rental properties in Florida and Houston.
A second survey, “How Americans View Homeownership” carried out by Ipsos Public Affairs, found that 68 per cent of those interviewed feel that now is the time to buy a home. However, many said that they will not be purchasing for the moment because of tighter mortgage lending criteria and as a result, will continue to rent a property.
The survey also revealed that the vast majority of interviewees believe they have their financial affairs in order and so will be in a better position to purchase a home in the future. 82 per cent claimed they know how to manage their personal finances and the same percentage said they do not spend beyond their means. This represents a change in the US property market scenario where previous financial instability among homebuyers was one of the main causes behind the foreclosure crisis.
Access to mortgage lending is seen as a barrier to homeownership in a New York Federal Reserve survey where two thirds of those interviewed said they believed it would be difficult for them to obtain a housing loan. In the “Why Aren’t More Renters Becoming Homeowners?” survey, most respondents expressed a preference for renting a property because of the mortgage obstacle. Other reasons given for renting were the low maintenance involved and the flexibility that comes with rentals.
The survey found renters bullish about the property market in the US with high expectations about house price growth in their area. They expect prices to go up by 5.4 per cent over the next year and over 60 per cent think their area represents good investment.
Source: Florida Realtors