Never, say never, or so the expression goes. But a considerable percentage of renters today are saying just that. According to a new Harris Interactive survey, commissioned by real estate search engine and information provider Trulia Inc., 27 percent of renters have absolutely no plans of ever becoming homebuyers.
The July 2010 survey involved 663 renters across the country ranging in age, sex, race, education and household income. While a substantial number of the renters claim they will never buy homes, 68 percent of those who say they do intend to purchase a residence do not expect to take the plunge for at least another two years. This segment of the renter population is likely to have a strong impact on the still-struggling housing market.
“Large numbers of people delaying their plans to buy a home, or not planning to buy at all, could have an enormous domino delaying effect on economic recovery in the U.S.,” Pete Flint, CEO of Trulia, says in a prepared statement. “Renters converting into buyers are crucial to turning around the housing slump, but the current economic crisis is causing people to become very hesitant to get off the fence and buy a home.”
The delayed buying trend, however, is not written in stone. Of those respondents hoping to invest in a home after a few years have elapsed, 79 percent note that certain conditions could compel them to push up the date and commence house-shopping plans within the next 12 months. Of that group, 47 percent cite the ability to save a sufficient amount of funds for a down payment as one of the determining factors, while 28 percent say that securing a new job would speed up the date. Other factors include the upholding of low interest rates, salary raises, change in the financial rationality of renting versus buying, and the stabilization of the local real estate market.
In the meantime, the national rental apartment market–sidelined by job losses and the economic downturn–is headed for a rebound. According to a second quarter report by multifamily investment advisory brokerage firm Apartment Realty Advisors, occupancy levels rose in 73 percent of the 30 major metropolitan surveyed, and effective rents in all of the markets went on the upswing.