Homebuyers Feel Renting Could be Detrimental to their Financial Future
Uncertainty over whether to keep renting or to buy a home in the current market has grown, with 57% of survey respondents saying they’re unsure whether it’s a good time to buy, compared to 48% at this time last year. While 37% of respondents say renting is the better choice right now, 70% of prospective buyers feel they’re not making a long-term investment in their future by renting, and 72% worry that rent increases could affect their current and long-term finances. However, the Bank of America Institute finds that while housing supply has increased in response to population change, the supply of rental properties in some regions may not be sufficient to account for growing populations. Against this background, while 37% of respondents in the HBIR say renting is the better choice right now, they still plan to take steps towards buying a home in the near future
Emotional Value of Owning vs. Renting
In addition to the financial benefits of homeownership that renters fear they’re losing out on, there is emotional value to owning a home as well. For homeowners, 89% surveyed said the idea of owning a home brings emotional fulfillment rather than added stress. Additionally, 67% of prospective homebuyers would prefer to own a home for the sense of permanence and emotional stability it provides, rather than the flexibility of renting, and 58% of said that owning a home is the best long-term decision for them to have control over their own living space.
Lacking Confidence & Avoiding Mistakes
While higher interest rates and home prices make the rent vs. buy decision difficult, many prospective buyers feel that they lack the confidence needed to begin their homebuying journey. Whether it’s not feeling confident in their understanding of interest rates (41%) or how to finance or secure a mortgage (41%), prospective homebuyers don’t want to make a mistake. Many may also be overlooking valuable homebuyer resources available to them, with over half of prospective buyers (53%) not feeling confident in their understanding of homebuying grants.
Meeting with a lending specialist can help buyers boost their understanding of the homebuying process, and thus their confidence. A lending specialist can also help buyers understand if they qualify for assistance programs, such as down payment and closing cost grants available through Bank of America’s Community Homeownership Commitment™.
