Survey: 67% of Renters Cite Lack of Assets as Hurdle to Homeownership

A little more than half of American renters believe owning a home is a more sensible choice than living in rental housing, according to a research study from ""Fannie Mae's"":http://www.fanniemae.com/portal/index.html Economic & Strategic Research Group.

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To better gauge the future of homeownership and the current shift toward renting, Fannie Mae's National Housing Survey took a look at renter attitudes and preferences in Q3 2012 to get an idea of their aspirations and expectations.

According to the findings, the majority of respondents believe renting has its advantages in terms of current finances and stress. When asked which situation would be better for their budget, 57 percent of renters surveyed chose ""renting"" over ""owning,"" while 52 percent said renting is less stressful. About half of respondents selected ""renting"" when asked which decision was best given the current economic climate.

However, when asked about control, privacy, security, and financial prospects, the vast majority (64 percent and up across each question) said owning is the better choice.

Overall, 51 percent of renters think owning is the more sensible choice over renting when comparing both the financial and lifestyle benefits. At 57 percent, young renters (ages 18-34) were more likely to answer that owning is the better choice.

Out of those who would prefer to own, many find themselves blocked by a number of hurdles. The most commonly cited problem was a lack of assets; 67 percent of aspiring owners have less than $10,000 in assets. Sixty-five percent said they would have trouble obtaining a mortgage today, while 64 percent felt they just wouldn't have sufficient savings.

Though most renters believe they would have trouble getting into the purchase market at this point, many still feel ownership is in their future. Out of those who would prefer to own, 39 percent said they are renting now so they can financially prepare to buy a home. Again, younger renters were more likely to see renting as a stepping stone to owning; 49 percent said they are simply preparing financially.

""Many aspiring owners, particularly the younger ones, say they are renting now primarily because they see it as a necessary step to make themselves financially ready to own in the future,"" said Sarah Shahdad, analyst for the Economic & Strategic Research Group. ""The strength of the economy, particularly job creation and real income growth, as well as the favorability of credit conditions should play significant roles in determining if and when many of these renters will see the fruits of their efforts to become homeowners.""