A new research by Federal Home Loan Mortgage Corp (OTCBB:FMCC) answers the question whether the rising rents are prompting resident to opt for homeownership? As per the research, the majority of renters are staying aside despite increasing rents. The government-backed firm conducted Harris Poll to survey over 2,000 U.S. adults in March 2015 to know their perceptions about renting.
The results
David Brickman who is EVP of Federal Home Multifamily said that they discovered rising rents is not one of the major factors in encouraging renters to purchase a home. The finding contradicts thinking of many people who believe more renters are looking to buy a home. The rising rents are just an indication of increased demand. The job market and economy is economy and with it the number of renters is also rising. The research stated that there is need of new apartment units amounting to 440,000 each year to meet increasing demand.
The figures
Rents surged 3.6% last year and are expected to grow 3.4% above inflation in 2015. As per the U.S. Census Bureau, over one-third of U.S. households rent their homes, and the people who take home on rent contribute for all net new household growth. Almost 38% of people who have resided in their home two years or more witnessed a rent growth in the last two years. There were only 8%who experienced a decline in rent.
Out of 38% who experienced a increase, 70% wants to purchase a home but cannot afford to buy at this point while 51% agreed that they have delayed their plans to buy a home. 44% indicated that intends to purchase a home and even are looking for it.
Federal Home Loan Mortgage Corp (OTCBB:FMCC) is currently trading at $2.48 losing 3.12% from yesterday’s close.
