High rents were recently voted as the second most popular reason to buy a house, just behind major life events. It makes sense, with soaring rents, buying a house can actually be cheaper and provide more upside. But there’s a catch. In order to buy a house, you need to save for a down payment, something that is easier said than done considering rising home values and the prevalence of bidding wars. So, with that in mind, you can expect to pay above asking price for a house, meaning a larger down payment would be nice. While nice, a larger down payment isn’t exactly possible because of those previously mentioned pesky high rents.
With all of this in mind, it makes sense that more than 50 percent of respondents to a Freddie Mac survey said they would continue to rent for the next three years, Realtor.com reports. This doesn’t mean renters don’t want to buy a home eventually; they are just being more realistic about their prospects.
Millennials aged 25 to 34 are the most likely group to buy a home within the next three years with 56 percent of respondents saying they plan to do so. For this group, and every other group planning on buying a home, the down payment is still the most difficult problem to overcome. The survey found 36 percent of people listed securing cash for a down payment to be the biggest obstacle in their way.