While many renters fear the longer-term consequences of renting on their financial futures, they are simultaneously unable to access the housing market due to high interest rates and prices.
According to the Homebuyer Insights Report from Bank of America, 70% of renters feel they are not making a long-term investment for their future. Seventy-two percent of renters also fear that rent increases could affect their current and long-term finances.
While 4 in 5 respondents believe renting is temporary and suits their current life stage, higher interest rates and home prices are adding uncertainty to the home buying landscape. Three-quarters of respondents to the Bank of America survey plan to buy within the next five years, though 57% are unsure whether it is a good time to buy.
In the same survey conducted a year ago, only 48% of respondents were uncertain about whether it was a good time to buy. Among first-time home buyers, 62% of respondents expressed uncertainty surrounding the housing market.
“Given the highly competitive home buying market, renters are unsure whether now is the right time to buy,” says Matt Vernon, head of consumer lending at Bank of America. “That said, our research continues to show that the vast majority of prospective home buyers overwhelmingly feel buying a home, now or in the future, is the best decision for them in the long run.”“Given the highly competitive home buying market, renters are unsure whether now is the right time to buy,” says Matt Vernon, head of consumer lending at Bank of America. “That said, our research continues to show that the vast majority of prospective home buyers overwhelmingly feel buying a home, now or in the future, is the best decision for them in the long run.”
Bank of America’s quarterly On the move indicates a further complication in the housing market: population flows, particularly to markets in the South, are putting pressure on both housing and rental supply. The Bank of America Institute finds that while housing supply has increased in some areas in response to in migration, the supply of rental properties in some regions may not be sufficient to account for growing populations.
The results of the Homebuyers survey indicates that a majority of both homeowners and prospective home buyers agree on the financial and emotional benefits of homeownership. Two-thirds of renters feel they are “losing out” on such benefits by renting rather than owning.
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