A recent survey completed by lending giant Freddie Mac shows the factors affecting many home-owners and renters; and why many residents opt to continue renting rather than increase household debt with a mortgage…

The recent survey by Freddie Mac shows that financial decisions are driving both renters and home-owners to consider housing based on several factors. You can read the original article in its entirety here. Freddie Mac’s report noted that they surveyed over 4,000 individuals, and that the data was weighted to mirror the country’s composition.

  • Interestingly, the survey showed the majority of participants (both renters and home-owners) viewed renting as more affordable than owning a home. With 82% of survey-takers believing renting to be more affordable, this metric rose 15 points from February of 2018 according to Freddie Mac’s data.
  • Workforce housing members such as teachers, nurses, and first-responders made housing decisions based on their ability to make payments on student loan debt. Workforce housing is one type of rental class typically characterized by older, more affordable communities located in populous areas with access to transportation and decent schools. BAM has often invested in workforce housing, as it remains an asset class typically both in demand and protected from the waves of economic storms.
  • In the Freddie Mac survey, over half of the home-owner respondents and 44% of the renter respondents noted they made housing decisions based on child care decisions. Another BAM consideration when looking at a potential investment community is whether it’s located in an area with access to good jobs and quality schools, because so many residents make housing decisions based on the needs of their children.
  • 81% of Generation X and 80% of Millennials note that they don’t have the money saved to overcome high down payments and closing costs required for home ownership, while 71% of Baby Boomers cite the same concerns. Specifically, Boomers and Millennials represent both the largest generations as well as the largest demographic of renters. While financial concerns do account for some of the motivation, there are other reasons these generations tend to be renters as well: Boomers are downsizing and giving up the maintenance/upkeep of a house and yard as well as the cost of a mortgage with HOA dues and other potential expenses, while Millenials may prefer renting if they aren’t yet starting families, are intending to focus on careers, or don’t want to be tied down to one location.