Rental Satisfaction Drives Buying Decisions
Satisfaction over the rental experience is a major factor in deciding whether a renter will decide to purchase a home, according to Freddie Mac research.
Renters who are the most satisfied with their rental experience were found to be more likely to continue renting (68%) than to purchase a home (32%), the study showed.
Read more: Why Renters May Be in Trouble
"As we gather data each quarter, we are finding the old perception that renting is something people do until they buy is not always true,” says David Brickman, executive vice president of Freddie Mac Multifamily. “The trend shows that satisfied renters are more likely to continue renting, even as we are seeing rising rents in the market. Dissatisfaction may drive renters to buy, and we are seeing a slight decrease in satisfaction among single-family renters. We will continue to monitor this for stronger indicators and trends, but for now, the single-family rental home market may be a good place to look to find potential home buyers."
The number of U.S. renter households is up again for the tenth consecutive year, according to the U.S. Census Bureau. More households of all sizes, income levels, and age ranges now rent their homes. Renters are leading household formation, which is expected to keep climbing due to the improving economy, millennials continuing into adulthood, and immigration, Brickman says.
The study also found that single-family renters are significantly more likely to say they expect to buy than multifamily renters (53% vs 36%) when asked about their plans in the next three years. In the U.S. about 15 million households rent a single-family house and 25 million rent an apartment, according to U.S. Census Data. Sixty-seven percent of apartment renters report being satisfied compared to 60% of single-family property renters.
Source: “Dissatisfaction Will Make Buyers of Multifamily Renters,” CoStar Group (Aug. 26, 2015)
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