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Want to own but stuck renting?

Posted by Scott Van Voorhis March 3, 2014 08:54 AM

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Not only are rising rents bad for apartment dwellers, it is making the dream of home ownership increasingly unattainable for millions of Americans.

That is one of several findings in a new study released by the nonprofit Demand Group, a joint venture of the Conference Board and Nielsen. (The Washington Post's Wonkblog offers a pretty interesting take on the study )

As many as 31 percent of renters are forking over 30 to 50 percent of their pay on rent. And a quarter find themselves signing over more than half of their paychecks to their landlords.

Yet while large numbers of renters still hope to buy someday, they may wind up finding themselves locked out of the market at a time when housing prices have yet to fully recover in some communities, the report finds.

More than 74 percent of those surveyed argued that home ownership should be "an important long-term goal" while an even higher number, 77 percent, agreed with the statement that housing is "an excellent investment."

Yet nearly half of would-be homeowners who say they hope to buy in the next five years have not saved enough to make that a reality.

"Many still have aspirations beyond their means," the study notes.

In cold hard numbers, that means as many as 4 million renters could find their dreams of home ownership dashed over the next few years.

Here's an excerpt:

Many householders hope that the dream of owning
their own home will soon become a reality. More
than half of survey respondents said they intend
to purchase a home, many for the first time,
when they next move. Half of those planning to
rent their next home said they plan to purchase
eventually.

However, there is evidence that some of these
aspirations may go unfulfilled. First, the purchas
-ing and financing plans of those intending to
buy their next home are often not realistic. Of those
planning to purchase a home and finance it with
a mortgage, almost half are unlikely to obtain
the mortgage they would like under their current
financial circumstances, because they either lack
a down payment or the means to save for one,
do not have the income to support the implied
mortgage payment, or are hampered by concerns
about their credit history or related personal
finance problems. Of those planning to purchase
a home within the next five years, almost 45
percent report they do not yet have the level of
savings and equity needed.

This blog is not written or edited by Boston.com or the Boston Globe.
The author is solely responsible for the content.

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About boston real estate now
Scott Van Voorhis is a freelance writer who specializes in real estate and business issues.

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