Still Renting? New Studies Show Renters Struggling More Than Homeowners
If you’re still renting and waiting for the right time to buy, you might be surprised to learn that recent studies by the Urban Institute found that as a whole, renters are struggling more than homeowners. Let’s take a closer look at the numbers:
The study looked at how well both renters and homeowners were able to cover a set of essential or basic needs, including housing, food, utilities and medical care. Overall, renters are more likely to struggle to cover all of their essential needs than homeowners. The study found that 46% of renters struggled to adequately cover all of their essential needs, compared to 36% of homeowners.
The study found that financial hardship caused nearly 20% of renters to experience one or more unmet medical needs, 13% of renters had difficulty covering their rent payment and 30% of renters experienced food insecurity. By comparison, nearly 17% of homeowners had unmet medical needs, 9% of owners had difficulty covering housing costs and 19% of owners experienced food insecurity.
Why are Renters Struggling More?
While the numbers show both renters and homeowners experience struggles to cover their basic needs, a larger percentage of renters have experienced difficulty in every category. Renters face higher financial uncertainties and are at higher risk for financial or material hardship. One key reason for financial vulnerability among renters is that rental rates have been increasing faster than wages for decades. From 1960 to 2016, median rental rates went up by more than 60%. During that same period, renters’ wages have increased only 5%. While not a “cure”, home ownership does offer an increase in housing stability by moving renters from the ever-increasing housing cost structure of renting to a more stable mortgage cost structure.
If you’re still renting, buying a home can provide a path to greater financial stability and you’ll be building valuable equity for the future. If you feel trapped in the rental market, it’s time to talk to a Century 21 Broadhurst agent about programs and options to help you become a homeowner and break free from renting.