The growing investor interest in the single family rental market understandably brings a lot of questions. Some of the most frequent ones we hear from clients and contacts are: “Who are the people renting these homes?” “Why are they doing it?” And, “Do these renters ever want to become homeowners? ”We also want to understand these issues with certainty because that knowledge helps us form our view on the future of home sales and the health of housing. Now, thanks to data from Fannie Mae’s National Housing Survey* and analysis from our own Sean Fergus, we have the facts and analysis to answer these questions and more.
Here are some key takeaways from our latest white paper “The Homeowner Wannabees”.
Single Family Renters are different from other renters because they:
- Have higher incomes
- Have lower credit scores
- Have larger households with more kids
- Are less likely to believe their rent will increase
- Are more likely to intend to buy a home someday (70% to 59%)
- Value safety more, and surprisingly see single-family homes as a safer environment
Single-family and multifamily renters bear some resemblance to each other. They both:
- Believe homeownership makes more sense than renting
- Believe obtaining a mortgage is very difficult
- Believe owning provides a safer environment than renting
- Do not believe home prices will go up in the next year
- Are not concerned about losing their job in the next year
The two main differences are:
- Multifamily renters are more likely to anticipate a rent hike (53% to 44%)
- Single-family renters find credit to be the biggest hurdle to homeownership (29%) while multifamily renters find income to be the biggest hurdle (25%).
Based on our findings in this report and other research we have conducted, we predict that many of these single-family renters will likely enter or re-enter homeownership over the next several years as they improve their credit and financial situations. This differs materially from multifamily renters, who have a lower desire to purchase at some point in the future.Please Contact us for support on incorporating this, and other housing knowledge, into an actionable plan for your business.
This paper leverages data and findings of Fannie Mae’s National Housing Survey. The John Burns Real Estate Consulting is solely responsible for the analysis of, content of, and methodology used for this paper, which does not necessarily reflect the opinions of Fannie Mae.
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