Oct. 2015 - Diversified We Stand, Divided We Fall

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TH E M R EP O RT | 55 O R I G I NAT I O N S E R V I C I N G A NA LY T I C S S E C O N DA R Y M A R K E T ANALYTICS THE LATEST Single-Family Renters May Be More Motivated to Become Homeowners Than Those in Apartments Dissatisfaction with renting leads to a desire to own a home, and more single-family renters are dissatisfied than apartment renters, according to industry data. N ew research conduct- ed by Freddie Mac released in August indicated people liv- ing in single-family rental (SFR) properties (a house, townhouse, or condo) may be more likely to buy a home than those living in apartments. Freddie Mac's latest survey, conducted in June, found overall about 55 percent of renters in both single- and multi-family properties intend to continue renting in the next three years. When dividing up the two categories, however, the data indicated 53 percent of renters in SFR properties intend to buy a house in the next three years compared to just 36 percent of multifamily renters who plan to buy in that period. One factor in deciding when to buy a home is how satisfied the renter is with the rental experi - ence, according to Freddie Mac's June survey. Approximately 68 percent of those satisfied with their rental experience said they intend to continue renting, compared to 32 percent who said they plan to buy a home. A higher percentage of apartment renters (67 percent) than SFR property renters (60 percent) reported being satisfied with the rental experience. "As we gather data each quarter, we are finding the old perception that renting is some - thing people do until they buy is not always true. The trend shows that satisfied renters are more likely to continue renting, even as we are seeing rising rents in the market," said David Brickman, EVP of Freddie Mac Multifamily. "Dissatisfaction may drive rent - ers 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." According to the U.S. Census Bureau, about 15 million households are of the SFR variety, while about 25 million rent apartments. "The number of U.S. renter households is up again for the 10th straight year, according to the U.S. Census Bureau," Brickman said. "More households of all siz - es, income levels and age ranges now rent their homes. Renters are leading household forma- tions, which are expected to keep climbing due to the improving economy, millennials continuing into adulthood and immigration." In the June survey, 44 percent of respondents who have lived in their homes for at least two years say they experienced an increase in their rent in the last two years, compared with 38 percent in a March survey. About 70 percent of those who experienced an increase say they want to buy a home but cannot afford to, while 44 percent said they would like to buy a home and are currently searching. About 49 percent in September said they like where they live and plan to stay regard - less of how much the rent in- creases, compared to 46 percent in March. In September, 44 percent said they have put off plans to purchase a home, compared to 51 percent in March. Freddie Mac commissioned Harris Poll to survey approxi - mately 2,000 adults online each quarter for both the June and September surveys.

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