More boomers favor renting, with little
interest in buying a home
CHARLOTTE, N.C., May 15, 2024
/PRNewswire/ -- Many prospective homebuyers fear the long-term
consequences of renting, including 70% who feel they're not making
a long-term investment in their future, and 72% who worry that rent
increases could affect their current and long-term finances,
according to a new Bank of America Homebuyer Insights Report
(HBIR), conducted in partnership with Bank of America
Institute.
However, with higher interest rates and home prices, uncertainty
over whether to keep renting or to buy a home in the current market
has grown. Today, 57% of respondents are unsure whether it's a good
time to buy, compared to 48% at this time last year. This trend is
even more prevalent among first-time homebuyers, as 62% shared
they're unsure what to do.
"Given the highly competitive homebuying market, renters are
unsure whether now is the right time to buy," says Matt Vernon, Head of Consumer Lending at Bank of
America. "That said, our research continues to show that the
vast majority of prospective homebuyers overwhelmingly feel buying
a home, now or in the future, is the best decision for them in the
long run."
These decisions are further complicated by the continued
population flows across the United
States. In its quarterly On the move publication,
Bank of America Institute notes that cities in the South continued
to see large inflows of people as of the first quarter of 2024,
often fueled by the younger generations.
The Institute finds that while housing supply has increased in
response to population change, the supply of rental properties in
some regions may not be sufficient to account for growing
populations. Against this background, while 37% of respondents in
the HBIR say renting is the better choice right now, they still
plan to take steps towards buying a home in the near future. Among
prospective buyers, 81% said that renting is temporary and suits
their current stage in life, and 76% are planning to buy a home
within the next five years.
The Emotional Value of Owning vs. Renting
New insights
from this research show that most homeowners and prospective
homebuyers agree on the many financial and emotional benefits of
homeownership—benefits that two-thirds (66%) of renters feel
they're losing out on.
- 89% of homeowners said that the idea of owning a home brings
emotional fulfillment rather than added stress
- 67% of prospective homebuyers would prefer to own a home for
the sense of permanence and emotional stability it provides, rather
than the flexibility of renting
- 58% of prospective homebuyers said that owning a home is the
best long-term decision for them to have control over their own
living space
However, baby boomers are an anomaly. Today, 80% of baby boomer
renters believe that it's better to rent than to buy a home in the
current environment – up from 63% a year ago. This can be
attributed in part to the fact that baby boomers say:
- They appreciate the freedom from property maintenance and
repair work that renting offers (90%)
- They prefer to avoid the financial responsibilities and
stresses associated with homeownership (87%)
- And 83% value the sense of freedom to move when and where they
want to that comes with renting instead of owning a home
Lacking Confidence & Avoiding
Mistakes
Exacerbating the difficulties presented by higher
interest rates and home prices, many prospective buyers feel that
they lack the confidence needed to begin their homebuying journey,
and don't want to make a mistake.
- 41% are not confident in their understanding of how to finance
or secure a mortgage
- 41% are not confident in their understanding of interest
rates
- 39% are not confident they understand homebuying
terminology
- 53% are not confident in their understanding of homebuying
grant programs
"Grants are a valuable resource to help bridge the gap
between your savings and a downpayment," shares Vernon. "Meeting
with a lending specialist can be a great first step to see
if you qualify for assistance programs, such as Bank of
America's down payment and closing cost
grants."
However, some buyers do feel they made mistakes during the
homebuying process. Two-thirds (66%) of current homeowners said
they would have done something differently when buying their first
home, including: saving more for a down payment (26%), spending
more time shopping around (19%) and considering other neighborhoods
(18%), and saving money for new appliances or other updates they
wanted to make to the home (17%).
Community Homeownership Commitment™
Bank of America
can help. The Bank of America Community Homeownership Commitment, a
$15 billion commitment, aims to help
low- and moderate-income homebuyers across the country begin to
build their personal wealth and family legacy through the power of
homeownership. The program includes a combination of specially
designed products, resources and expertise as well as one of the
most generous grant programs in the industry. Bank of America
offers up to $17,500 in combined down
payment and closing costs grants and has already granted nearly
$467 million in those grants as of
the first quarter 2024, with 85% of those grants going to
first-time homebuyers.
About Bank of America's Homebuyer Insights
Report
Sparks Research conducted a national online survey on
behalf of Bank of America between March 5th
and March 18th, 2024. A total of 2,000 surveys (1000
homeowners / 1000 renters) were completed with adults 18 years old
or older, who make or share in household financial decisions, and
who currently own a home/previously owned a home or plan to own a
home in the future. In addition, 200 additional surveys were
conducted with first time homeowners (for a total of 615
responses), and 200 additional surveys were conducted with
prospective first-time homeowners (for a total of 972 responses).
The margin of error for the national quota is +/- 2.2 percent at
the 95 percent confidence level. Select questions allowed
respondents to choose more than one answer, resulting in responses
that may equate to more than 100 percent.
About Bank of America Institute
Bank of America
Institute is dedicated to uncovering powerful insights that move
business and society forward. Established in 2022, the Institute is
a think tank that draws on data and analyses from across the bank
and the world to provide timely and original perspectives on the
economy, sustainability, and global transformation. The Institute
leverages the depth and breadth of the bank's proprietary data,
from approximately 68 million consumer and small business clients,
56 million verified digital users, $4.2 trillion in total payments in 2022 and
$1.4 trillion in consumer and
wealth management deposits. From this robust data set, the
Institute provides a unique perspective on the health of the
economy. It also elevates thought leadership from throughout the
bank that addresses long-term trends and shares these findings with
the general public.
Bank of America
Bank of America is one of the world's
leading financial institutions, serving individual consumers, small
and middle-market businesses and large corporations with a full
range of banking, investing, asset management and other financial
and risk management products and services. The company provides
unmatched convenience in the United
States, serving approximately 69 million consumer and small
business clients with approximately 3,800 retail financial centers,
approximately 15,000 ATMs (automated teller machines) and
award-winning digital banking with approximately 57 million
verified digital users. Bank of America is a global leader in
wealth management, corporate and investment banking and trading
across a broad range of asset classes, serving corporations,
governments, institutions and individuals around the world. Bank of
America offers industry-leading support to approximately 4 million
small business households through a suite of innovative,
easy-to-use online products and services. The company serves
clients through operations across the
United States, its territories and more than 35 countries.
Bank of America Corporation stock is listed on the New York Stock
Exchange (NYSE: BAC).
For more Bank of America news, including dividend announcements
and other important information, visit the Bank of America
newsroom and register for news email alerts.
Reporters may contact:
Susan Atran, Bank of America
Phone: 1.646.599.3300
susan.atran@bofa.com
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SOURCE Bank of America Corporation