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While most renters are interested in owning a home in the future, this is still a years-away goal for many. According to a new survey, the majority of renters polled say they can’t currently save up any money right now.
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The new survey conducted by rewards app Piñata — a program which works with renters to build their credit and get cash back for paying their rent — found that 64% of renters polled say they are not being able to save any money at all right now, let alone a down payment, confirming their status as “rent-burdened.” Further, the survey found that 30% of respondents said they’ve taken out a loan before to help pay rent, and half of those respondents had done so within the past year.
Lily Liu, CEO of Piñata, told GOBankingRates that with many renters being financially impacted by the pandemic due to job losses and other unforeseen challenges, it’s unfortunate — but not surprising — that loans were needed in the past year in order to make ends meet.
“With home prices jumping 9% from a year before, and another 9% expected over the course of this year, more potential homeowners will be left renting,” Liu said. “With more people renting, and less available units, rent prices have skyrocketed, surpassing even pre-pandemic levels. Based on those statistics, we can infer renters may continue to need extra support to make their monthly payments. But we’re hopeful that things will get better for renters as residential construction permits shot up by over 25% annually.”
She added that this increase in new rentals could help meet the demand, lower the competition and decrease the competitive prices renters are currently facing.
The survey also found that 38% of those polled said they wish they could be saving for a home right now. Asked what renters can do to achieve the goal faster, Liu said to work on building your credit.
“Obviously saving up money for a down payment is important, but having good credit is a major factor in purchasing a home, from impacting interest rates to even getting approved at all,” she said. Indeed, the survey noted that 25% of renters polled don’t even know their current credit score, and 30% weren’t actively doing anything to improve their score.
“There are many ways to build credit, including paying your credit card bill, car payments or student loans on time each month, but those options may not be possible for everyone. In fact, 45 million adults are considered credit invisible, which can cause these …….