Expensive Down Payments, Fewer Available Homes Steer Renters From Buying A Home

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October 17, 2016

A certain percentage of the population has opted for renting instead of buying a home.

Research from Zillow found that 13.8 percent of renters have the income and credit score to purchase a house, but choose not to.

Some renters live in metros with expensive housing, like Washington, D.C., where the median home value is more than half a million dollars. Since rent is also costly, people find it difficult to save for a down payment.

Transplants test the waters by renting a place before buying. Some simply prefer the flexibility renting provides.

But, even if a renter has the salary, credit and down payment in order, a lack of housing inventory may be the driving factor in continuing to rent over buy. New research found that areas with the most qualified renters also have the fewest homes for sale, which is especially true of areas with strong job markets. “When faced with hurdles of high prices and low inventory, first-time home buyers are renting longer than ever before, even if they are qualified to buy,” Zillow Chief Economist Dr. Svenja Gudell said.

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