Renters are now less confident in home buying than before pandemic, survey shows
With real estate markets at all-time highs, that doesn’t mean everyone is in the market to buy.
Renters’ confidence in their ability to buy a home has gone down since before the pandemic, according to a recent Rent.com survey.
Of the 3,000 renters surveyed nationwide, 35% weren’t confident in their ability to ever buy a home, stating they were either “not very confident” or had “no confidence at all.” Of these, over three quarters cited a financial circumstance — homes costing too much or inability to afford a down payment — as their reason for pessimism.
As the pandemic has worn on, confidence has declined. When asked how confident they were at the start of 2020, responses were more positive: Only a quarter of renters had little to no confidence in becoming homeowners before the pandemic hit. And the number of renters who indicated they were very or extremely confident they would own a home was 7% higher.
Nearly 40% of renters still had hopes of owning a home in the next two years, but many delayed their plans. Eighty-three percent of renters who had planned on buying a home in 2020 before the pandemic reported waiting longer to make their purchase. Nearly half of respondents cited cost as the primary reason for the delay. Change in employment was the second-most-cited reason.
Just 9% of renters said they plan to buy in 2021 and 29% in 2022, while more than 50% of renters have no immediate plans to buy.
In Maine, it’s easy to understand renters’ reluctance to pull the trigger on home ownership in a record-breaking real estate market.
The median price of a Maine home in June was $310,000, up almost 25% from $249,000 in June 2020, and creeping closer to the national median of $370,600, according to just-released data from the Maine Association of Realtors and the National Association of Realtors.
Maine has seen a double-digit rise in single-home sale prices each month this year and an almost 14% increase in prices between 2020 and 2019.
Older and wealthier renters even less likely to buy
Age played a factor in renter’s confidence in owning a home — of those surveyed, baby boomer renters are least confident in their ability to buy a house. Just 27% of renters under 30 have little or no confidence in ever owning a home. That number goes up to 32% for renters 30-44 and 39% for ages 45-60.
While income also played a part in renter confidence, the results were surprising. The biggest decrease in confidence from pre-pandemic days was in renters earning $200,000. Nearly 35% of renters earning $200,000 or more were not confident in their ability to buy a house.
The cause could be that high-income renters are looking to own in more expensive markets, where earning $200,000 isn't enough to afford home prices far over average.
For households making under $50,000, well over a third polled believe they are highly unlikely to ever own a home. But the pandemic hasn't much moved the already-low needle among that income bracket.
In March 2020, only 5% fewer of those making under $50,000 held homeownership dreams. In comparison, in every bracket above them, confidence in homeownership dropped between 11% and 13% over the same period.
While many renters have appeared to hit the pause button on home-ownership goals, things may be looking up for them in the near future. Active single-family listings have been trending up in Maine for the last few months, which should bring a better balance to the market over time, said Aaron Bolster, president of the Maine Realtors Association and broker/owner of Allied Realty.
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