COVID-19 is quashing the hopes of many renters eager to invest in a home of their own.
According to a recent survey conducted on RENTCafe.com, at the beginning of the year, 11% of renters indicated they’d been intent on buying a house this year. Among Gen X renters, 15% had the purchase of a house squarely on their radar in 2020, as had 14% of older millennials.
The survey, which ran at the end of May 2020, asked 7,000 renters about their housing plans prior to and following the pandemic’s touch down.
While plans are made to be broken, it is now being reported that 43% of renters that were on the precipice of plucking down the cash for a residence have been deterred by the pandemic—not to mention skyrocketing home prices.
Among renters compelled to stay the course; fueled by Gen Z-ers and Baby Boomers, the largest share was going to shift gears and settle into a smaller unit. Millennials and Gen Xers?
In addition to economic uncertainty, 43% of prospective homebuyers were prompted by lost income, changed their plans, stated the report. The handful of renters set on buying a home this year hit the brakes as well. Among older millennials, as many as 50%—the demographic most likely to buy—were forced to take a pass.
Relatively speaking, baby boomers essentially were undaunted, determined not to allow the pandemic to derail their plans. Just 37% rethought buying a home purchase, while nearly one-quarter of renters now believe buying a home is perpetually out of reach.
All that said, however, in the eye of the pandemic, even renting is no sure thing. In April, numerous states and cities implemented eviction moratoriums to abet the effort of renters to keep their homes, reported by DS News.
The catch: it’s apparent that this action is no more than a temporary respite in light of a daunting issue. Meaning, while renters might be able to remain in their home for now, it doesn’t preclude an avalanche of evictions upon the lifting of the moratorium.
While these measures may keep renters in their homes today, they may easily lead to a flood of evictions the moment the moratoriums are lifted.
With close to half of all renters considered rent-burdened; meaning they spend more than 30% of their income on their monthly rent, renters are particularly vulnerable in this current economic crisis.
In a March article, according to two researchers from the Urban Institute, “eviction moratoria on their own, as many governments are proposing or enacting, would only address a small part of the crisis.” Without additional rent relief or flexible cash assistance, they added, moratoria could reduce COVID-19 transmission risks today but create an eviction tsunami later.