Many non-owners—those renting or living with someone else—are eager to buy a home. But their current financial situation is what is mostly holding them back.
The National Association of REALTORS®’ newly released “2019 Profile of Buyers and Sellers” report contained a new section this year, including a survey about non-owners and their views on homeownership. NAR released its annual report during the 2019 REALTORS® Conference & Expo in San Francisco this week.
But the main reason they aren’t buying yet is because they can’t afford to make the jump into ownership. “Making the largest financial purchase in one’s life relies on the financial strength to do so,” the report notes. Seventy-five percent of non-owners surveyed say they believe homeownership is part of the American dream. Eighty-one percent of non-owners say they want to own a home in the future.
Fifty-seven percent of non-owners say they believe it would be “somewhat” difficult to become a homeowner based on their current financial situation. But there is hope: 49% view the economy as improving, and 42% view their personal financial situation as improving over the next 6 months.
Those who do finally transition into homebuying are getting more help from family. The 2019 NAR report shows that a third of first-time buyers used down payment help from family and friends. But those looking to buy continue to find a shortage of homes for sale at their price points as well as higher home prices. “Low inventory conditions hurt would-be first-time buyers most,” Lawrence Yun, NAR’s chief economist, said about the findings of the report. “Their homeownership dream and the opportunity to build wealth gets delayed until more inventory choices reach the market.”
But as soon as that happens and non-owners find themselves in a more stable financial situation, aspiring buyers say they’ll be ready to buy and believe they need to do so for their long-term financial health. After all, 78% of non-owners surveyed say they feel owning a home is a smart financial investment—about the same rate as recent home buyers, the NAR survey showed. Seventy-three percent say that owning a home would make it easier for them to save money and build assets over the long run; 20% believe owning a home is less risky than renting a home.
The triggers that will most motivate aspiring buyers into homeownership sooner: marriage or starting a family (31%); improvement in their financial situation (30%); and the desire to settle in one location (16%).
The largest share of non-owners surveyed were millennials (at 49%), followed by 26% who were Gen Xers and 12% young boomers. Fifty-nine percent of non-owners are single and never married; 25% are married.