With home prices rising and more people paying a bigger chunk of their household income for a place to live, should it be any surprise that a record number of renters in a recent Freddie Mac survey say renting is more affordable than owning?
Eighty-four percent of renters, an all-time high, said they believe renting is more affordable, and that figure is up 17 percentage points from February 2018.
The “Profile of Today’s Renter and Owner” survey also found that affordability issues affect the average renter more than a homeowner. Freddie Mac said there are 42% of renters who paid more than a third of their household income on rent.
This is compared to only 24% of homeowners who spend that amount on mortgage payments.
But there is good news for renters looking to own. Given current low interest rates, 40% of renters said they plan to purchase a home.
“The housing market is strong and, based on our survey, the low mortgage rate environment may inspire both renters and owners to make an educated move this spring,” said David Brickman, Freddie Mac CEO. “While Baby Boomers tend to be satisfied with their current housing situation, younger generations are still struggling to determine whether to rent or purchase a home, largely due to lack of supply and affordability constraints.”