Do you rent? Do you own? Are you happy with your current living situation?
These are some of the questions we asked participants in our recent biannual survey of renters and owners, which gauges how Americans are feeling about their current living situation.
Responses fell in line with trends we have seen the past few years. The general sentiment continues to be that affordability is a key concern for both renters and owners and is one of the main drivers buying and renting decisions for many.
Perceptions of Affordability
The survey found the majorities of both renters (84%) and homeowners (85%) believe their current living situation is the most affordable option for them. For renters, this is an all-time high for the survey, up 17 points from 67% in February 2019.
But just because most people feel their current living situation is the most affordable option for them, doesn't mean housing affordability is not a challenge. Research shows housing costs are constraining family budgets for both renters and owners. The survey defined “cost-burdened” households as those spending more than one-third of their income on rent and, of those surveyed, 42% of renters and 24% of owners fall into that category. For renters, this is up 8% from this time last year.
Uncertainty for the Future
The impact of affordability goes beyond just the cost of housing with 67% of renters saying they made spending changes or have moved to afford their monthly housing payment. Additionally, the majority of renters expressed financial concern for the following costs in the next year:
- 69% are concerned about their rent going up
- 68% are concerned about paying for larger expenses
- 68% feel they will have less money to put towards savings
Even with affordability concerns, both homeowners and renters are open to exploring change in the current low mortgage rate environment. With mortgage rates near historic lows, both groups expressed interest in taking advantage of these rates in the next several months. In fact, 40% of renters said they plan to purchase a home and 46% of owners said they'd renovate their home.
If you're looking to sign a new rental lease, or you're interested in taking the next steps to become a homeowner, visit My Home by Freddie Mac®.