Some people think renting is cheaper, or more convenient. Homeowners, meanwhile, are optimistic again about the value of their homes.
It’s all about the down payment for renters who would prefer to buy.
The Federal Reserve Board conducted its second Survey of Household Economics and Decisionmaking in October of 2014 and found that most people that are currently renting would prefer to own their homes but don’t buy because they can’t afford the necessary down payment.
That was what 50 percent of renters said on the survey, while 31 percent of renters said they did not believe they would qualify for a mortgage.
The SHED was sent to more than 4,000 homes for the 2014 survey, and more than 2,000 from the 2013 survey were re-surveyed to compare one year’s results to the next.
After the recession of 2008, home values plummeted, as the housing bubble burst. But 43 percent of homeowners believe their homes increased in value from 2013 to 2014, while 37 percent believe the value of their homes stayed the same, and 13 percent said they thought their home value decreased.
For many homeowners, the housing bubble put them in a situation where their mortgage cost more than their house was worth. As of October 2014, 14 percent of Americans still believe that to be the case, while 70 percent think the value of their home exceeds the amount of their mortgage.
Among the survey respondents, 80 percent live alone or with their immediate family, while almost 10 percent were living with their parents. Less than 5 percent were living with a roommate.
Of the 20 percent not living with their immediate family, 64 percent are doing so to save money or to provide financial assistance to those who are living with them. Twelve percent are caring for a sick, disabled or elderly family member by living with them.
While 61 percent of respondents are homeowners and 28 percent rent, 81 percent of the renters would prefer to own their home if they could afford to do so. However, 27 percent of renters say they believe it is cheaper to rent than to own, and 25 percent say it is more convenient to rent.
Of those who own a home, 39 percent said they believe their home value will rise in the next 12 months, while 6 percent said they thought their home value would decrease.
Kent McDill is a staff writer for Millionaire Corner. McDill spent 30 years as a sports writer, working for United Press International and the Daily Herald of Arlington Heights, Ill. From 1988-1999, he covered the Chicago Bulls for the Daily Herald, traveling with them every day through the nine-month season. He also covered the Bulls for UPI from 1985-88, and currently covers the team for www.nba.com. He has written two books on the Bulls, including the new title “100 Things Bulls Fans Should Know And Do Before They Die’, published by Triumph Books. In August 2013, his new book “100 Things Bears Fans Should Know And Do Before They Die” gets published.
In 2008, he resigned from the Herald and became a freelance writer. The Herald hired him to write business features and speeches for the Daily Herald Business Conferences and Awards presentations.
McDill also writes a monthly parenting column for the Herald’s Suburban Parent magazine.
McDill is the father of four children, and an active fan of soccer, Jimmy Buffett and all things Disney.