Economic uncertainty and loss of income were the reasons most cited for changing plans.
The economic impacts and safety concerns of COVID-19 epidemic have influenced over 40% of current renters to reconsider their plans for homeownership, either delaying them into the future or ending them outright, according to a new RENTCafe report.
In a survey of 6,963 RENTCafe users in May, a full one in 10—11%—reported that they had been ready or planning to buy a home in 2020. Broken out by age group, older millennials and Gen X renters took the lead in ownership planning at 14% and 15%, respectively. At the same time, 25% of renters intended to upgrade their apartment, 24% planned to move to a similar unit, 29% planned to downgrade, and 10% intended to renew their current lease.
However, as stated, 43% of respondents reported that their homeownership plans had been disrupted by the COVID-19 pandemic. Older millennials were the most likely to delay their dreams, with 50% stating they had reconsidered homeownership, followed by younger millennials at 43% and Gen X at 42%.
The most commonly cited reason for delaying homeownership was “economic uncertainty,” followed by “loss of income.”
When asked about changes to long-term plans, the majority of respondents remained optimistic, with 56% of all respondents, including 68% of older millennials and 62% of younger millennials, planning to become homeowners within five years.
Twenty-one percent say they are likely to buy a home in more than five years, and 23% say they never plan to buy a home. Half of baby boomer renters expressed they had no intention of buying a home ever again.
“When it comes to the complexities of real estate investment, personal finances, and future economic time horizons, the conventional wisdom of buying being better than renting does not always hold true,” says Doug Ressler, manager of business intelligence at Yardi Matrix. “Many renters don’t think that they’ll ever own a home because they might not afford additional expenses that come with this decision, such as interest, property taxes, insurance, and maintenance for the entire ownership period. On the other hand, renting consists only of monthly rent and a possible one-time deposit, therefore economically, renting might make more sense than buying a home.”