As the housing market enters its peak season for activity, a growing number of current renters say they plan to make the transition to homeownership within the next two years.
Overall, 60 percent of current renters say their intent of purchasing a home during this period, according to a recent survey from the PulteGroup. Specifically, 49 percent of renters want to purchase property so they can have the label of homeowners, while 44 percent say they want to make the transition for the investment opportunity. In addition, 36 percent say owning a home with give them the space they need to start or raise a family.
"Clearly the dream of homeownership is alive and well in America, yet we still have a ways to go to ensure more renters are able to take that important step towards buying their first home," said PulteGroup senior vice president Deborah Meyer. "Homeownership is more attainable than ever with historically low mortgage rates and competitive pricing, as well as affordable new homes designed for first-time home buyers coming into the market."
Personal finances holding some buyers back
A number of those surveyed said they have yet to obtain the financial safety and soundness required to own a home. Specifically, 54 percent say they are being held back from homeownership because they don't have enough money saved for a down payments, while 28 percent still believe renting is cheaper than owning, despite a national surge in rental rates in recent years. In addition, uncertaining in the job market continued to weigh heavily on the decisions of prospective buyers, as 23 percent feel they don't have the employment security needed to invest in a home.
However, despite some uncertainty, overall confidence is much higher than it was just after the housing market collapse.
"We are seeing a renewed sense of optimism, especially from young professionals and young families visiting our communities nationwide," Meyer added. "In fact, in the first quarter of this year, sales and traffic for our Centex homes, which caters to the value-conscious and first-time buyer, saw a significant improvement over last year - yet another sign of an improving housing market."
Affordability near all-time high
The upswing in renter sentiment toward can be attributed to the rising level of housing affordability seen in recent months. According to a report from the National Association of Realtors, at the beginning of 2012, the relationship between mortgage rates, median household incomes and property values pushed the affordability of owning a home to highest level recorded in recent history.