The vast majority of Americans who rent do not have the necessary income or credit score to actually purchase a home. That news comes courtesy of a recent study by Zillow, an online real estate database company that helps to connect potential homebuyers with home sellers.
The study found that approximately 86 percent of renters in major US markets are not in a financial position to buy a house.
The rate of homeownership in New Jersey, New York, and just about everywhere else in the United States has been on the decline ever since the housing bubble burst 10 years ago. In fact, the homeownership rate hasn’t been this bad in nearly five decades, with the home vacancy rate also approaching its lowest point in almost 40 years.
The problem is that far too many people are struggling with serious debt problems that can, in some instances, lead to bankruptcy. Regardless of whether those struggling to get out from underneath a mountain of debt eventually end up filing for bankruptcy, the reality is that these individuals have very little hope of being able to purchase a home anytime in the near future because their credit scores are not likely to be high enough to get approval for a home loan.
One of the reasons that many Americans may struggle to transition from being house and apartment renters to homeowners is that rents are steadily increasing, leaving renters with less ability to save up to buy a house later on. According to Zillow researchers, almost half of all renters in the U.S. are “cost-burdened” by their monthly rent requirements. (The standard definition of “cost-burdened” in this context is that the renter has to spend at least 30 percent of their income on housing.)
The outlook for renters going forward isn’t great, either: according to the Urban Institute, a think tank that conducts research on economic and social policies, nearly 60 percent of all households formed between now and 2013 will likely rent instead of buying a home. This could end up leading to a massive increase in rental costs.
For additional information, read the Yahoo.com article, “86% of American Renters Can’t Afford to Become Homeowners.” or Zillow’s article on housing affordability.
If you are struggling with debt as you try to save up to purchase a home in New Jersey, or if you need help with any debt-related issue, it is important for you to speak with a qualified real estate and debt management attorney. Joel R. Spivack, Esq., is an experienced real estate and debt relief lawyer who can help you with the home buying, home selling, or home foreclosure process. Contact Mr. Spivack today to schedule a free consultation.