November 21, 2013
Despite the financial toll the recent financial crisis has had on Americans, renters continue to hold homeownership in high esteem, and it remains a goal for the majority of them, according to the CALIFORNIA ASSOCIATION OF REALTORS®' (C.A.R.) "2013 Renter Survey."
Nearly three-quarters of renters rated homeownership as "important," and more than half of renters (52 percent) said they plan to buy a home in the future, as nearly all see the advantages of owning versus renting.
"It's encouraging that the majority of renters still believe buying a home is a good investment, even after the adverse effects of the Great Recession," said C.A.R. President Kevin Brown. "Renters clearly see the benefits of owning a home, citing building equity, freedom to do what they want with their home, pride of ownership, stability, and tax deductions as the top advantages of homeownership."
This is the first time C.A.R. has conducted its Renters Survey. The survey was conducted by telephone to 800 home renters statewide from April 26-May 25, 2013. The survey was also conducted online to 875 home renters statewide in August 2013. Demographic profiles of the two sets of respondents varied some, with the most significant difference being their age. The median age of online respondents was 39 and was 45 for telephone respondents.
While almost half of all respondents believed that gaining equity and investing for their future and their children's future was an advantage of homeownership, online respondents were twice as likely to carry that belief. Online respondents were also three times as likely to believe in freedom gained from homeownership and were twice as likely to take pride and feel satisfaction from owning something of their own.
There are other interesting differences between online and telephone respondents. Among online respondents to the survey, 33 percent indicated having outstanding student loans, with 84 percent averaging less than $10,000 of student loan debt. Fourteen percent of telephone respondents had outstanding debt, with 17 percent owing more than $50,000.
Additionally, telephone respondents are more stationary and are less likely to move in the near future. Meanwhile, more than one-third (35 percent) of online respondents plan to move within the next couple of years. Online respondents, for various reasons, are also more likely to see significant increases in their rents, with 17 percent indicating their most recent rent increase was more than 20 percent.
Twenty-six percent previously owned a primary residence, and 6 percent currently own real estate. Of those who previously owned a home, the reasons for selling include: Needed to move for family reasons (24 percent), foreclosure (14 percent), needed to move for work (13 percent), short sale (11 percent), and bankruptcy (3 percent).
Other key findings from C.A.R.'s "2013 Renter Survey" include:
Most renters (44 percent) who expressed the desire to own instead of rent were only renting out of financial necessity and the majority plan to buy in the next three years or longer.
Renters mentioned a lack of building equity (24 percent), the inability to make changes to their living environment (14 percent), and unpredictable rent increases (15 percent) as the top three things they dislike about renting.
The majority of respondents prefer to buy a single-family home over condominiums, townhomes, and other types of residences, with 77 percent indicating they plan to purchase a single-family home. Online respondents however are more likely to plan to purchase a townhouse, condo, or a mobile home, with 26 percent saying so, while only 19 percent of telephone respondents indicated planning a purchase of a townhouse, condo, or a mobile home.
More than four out of every 10 renters (41 percent) indicated they plan to purchase in the same county where they currently reside, and 14 percent plan to buy in the same neighborhood.
Currently, about half (51 percent) of all renters live in an apartment, with the remainder residing in a single-family home, a townhouse, or a condominium.
Renters are creatures of habit, with the average tenure in a residence being more than eight years.
Lastly, when asked if they intend to use a REALTOR® to make their home purchase, telephone respondents were more likely to use one, and half of online respondents did not know if they would use a REALTOR®. Online respondents were also twice as likely to begin their search for a home online, while telephone respondents were almost equally likely to begin online and talk to a real estate agent. Seventy-four percent of those that say they will begin their search online also say they plan to use a REALTOR®.