High Rent Looms Large for Would-Be Homebuyers

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The cost of rent is pushing more people into the housing market, according to a Redfin survey of homebuyers. More than one in five cited high rent as their top reason for house hunting in November, up from only 13 percent in our previous survey in July.

It’s no surprise, given that rents have been rising rapidly while wages haven’t. Nationally, rents rose between four percent and five percent in 2015 and have advanced by double digits in tech hubs and other cities.

The change in sentiment wasn’t driven by changes in geography, age, price or first-time buyers, all of which remained constant in both surveys.

Decision to Buy

Affordability

While rents are a growing motivator, buyers cited affordability as their top concern. Prices have been uppermost in buyers’ minds since at least August 2014. Sale prices mounted steadily in 2015, notching 8.8 percent growth in December compared to the previous year.

Buyers Concerns

Price Expectations

A big share of buyers–66 percent– think home prices will rise this year, in line with findings from a year earlier and a shift from July, when less than half of the respondents anticipated rising prices.

At the same time, more buyers expect prices to stay the same this year, 23 percent in November compared to 14 percent last year.

Home Price Expectations

Buyers’ Sentiment

Sentiment improved, with an increasing share of buyers saying they’re more inclined to buy now, an increase of about four percentage points from the previous survey three months prior.

Perspective on Buying

About the Survey
This survey was conducted Nov. 15-18 with responses from 1,146 Redfin customers in 35 states.

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taylormarr

Taylor is a lead economist, data scientist, and visualization whiz on the research team at Redfin. He is passionate about urban planning and housing policy. Taylor went to graduate school for economics in Berlin, where he focused on behavioral economics and the housing market crash. Redfin is a real estate brokerage with agents across the United States.

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