The American dream for a lot of people continues to be hitched to homeownership. But even that is complicated, according to the results of a recent survey of more than 6,000 people.
Some people aren’t as eager to jump into being saddled with a mortgage and all of the responsibility that accompanies owning a house, the Zumper survey found. It notes that 89.8 percent of renters intend to buy a home, however, only 71 percent of the respondents thought that homeownership was still tied to the American dream.
The “intent to buy was highest among younger respondents, particularly millennials between the ages of 20 to 29, 94.4 percent of whom stated that they plan to buy a home, a number that falls to 70.2 percent among renters between the ages of 50 and 59,” the survey says.
People might think young people burdened with student loans would be reluctant to take on a mortgage. But the Zumper survey shows a different trend. It found that 92.5 percent of today’s renters with student loans “had a greater intention of eventually buying a home” compared with 87.4 percent of those without student loans.
A lot of baby boomers who once had owned homes now prefer to rent. Call it the empty nest syndrome kicking in.
Many boomers who rent are divorced, widowed, separated or were never married. It helps explain a developing trend in homeowership rates and the growing appeal of apartment living, particularly in hot areas like downtown and midtown.
That puts a lot of upward pressure on rents, particularly stressing the budgets of low-income families. However, another Zumper survey found that Kansas City was 66th in the country in the rental market in July.
The median price for a one-bedroom unit was $740 a month in Kansas City while two-bedroom units ran $870. In comparison, San Francisco topped the list of most expensive rents at $3,460 a month for a one-bedroom unit and $4,790 for two bedrooms.
Homeownership rates have been affected by the draw of renting and the continued recovery from the Great Recession.
“Since peaking in late 2005 at 69 percent, homeownership in the United States as reported by the Census Bureau has been on a steady decline, recently falling to a historical low of 62.9 percent during the second quarter of 2016,” the survey noted. The homeownership rate averaged around 64 percent from 1965 to 1990.
Keep in mind that 2005 was before the Great Recession. Only in recent months have construction and home sales started to rebound. The survey found, however, that “many (people) are not yet able to afford a down payment in the city they currently live in.”
Millennials also have found a comfort with continuing to live with roommates. Rising rents in U.S. cities are partly to blame.
The survey showed that “a whopping 62.2 percent of millennial renters between the ages of 20 to 29 stated that they had roommates.” Of the people with roommates, 64.2 percent thought it was “a good deal” for housing.
Income didn’t seem to matter. “An interesting result was that more than half the individuals between the ages of 24 to 32 with self-reported incomes above $75,000 live with roommates, suggesting that higher income millennials may be choosing to live with roommates even if they could potentially afford to do otherwise,” the survey reports.