Renters are finally setting their sights on homeownership, according to an analysis released by credit reporting agency TransUnion on Thursday. In Q1 of 2017, a whopping 55 percent of all home shoppers were non-homeowners or renters.
The share of renter home shoppers represents a marked uptick over previous years. In Q1 2016, half of all shoppers were non-homeowners or renters. In the same period 2015, only 45 percent were.
According to Mike Doherty, Senior Vice President of Rental Screening Solutions at TransUnion, this trend will likely continue over the coming years—and multi-family property owners should brace for the impact.
“The rental market has seen sustained growth for the last several years, but occupancy rates have flattened from their peak in the second quarter of 2016,” Doherty said. “This new uptick in mortgage shopping could be a precursor to further declines in occupancy, which would impact rent growth—and ultimately, revenue—for multifamily property owners. In anticipation of this potential shift, owners and property managers should be offering the right amenities and programs designed to attract renters.”
Rising interest in homeownership was particularly noticeable amongst millennials who, according to TransUnion, comprised 29 percent of all home shoppers in the first quarter. That’s up from 28 percent in 2016 and 27 percent in 2015.
TransUnion’s analysis also looked at the credit-worthiness of America’s renters, finding that 34 million renters between 25 and 44 are eligible for a mortgage. Only 34 percent of renters in this age range have a credit score lower than 580, which TransUnion says is “a common benchmark used by some institutions to determine whether a borrower qualifies for a low down payment loan.”
Broken down, 37 percent of renters between 25 and 34 have a score below 580, while 42 percent of those between 35 and 44 have a score that low. For 45- to 54-year-olds and 55- to 64-year-olds, the shares were 40 percent and 32 percent, respectively. Renters 65 and up had the lowest share of sub-580 credit scores, at just 11 percent.
Read the full analysis at TransUnion.com.