A major part of adulthood is owning a home, something that feels out of reach for young adults across the U.S. right now according to a new study. A large portion of young Floridians even expect to never purchase real estate in Florida.
According to the new study conducted by Apartment List, Renters across the nation plan to always rent — Tampa renters surpass the national average of 12.3% with nearly 15% expecting to be stuck renting throughout their entire lifetime.
Young adults in the U.S. & Tampa cite their main reasoning to forego ownership to a lack of affordability in the housing market, with 69% reporting that the only forms of housing they can reasonably afford are rental properties such as apartment complexes & duplexes.
Even then, renting is still costing them a pretty penny. The average rental cost for a 1 bedroom apartment in Tampa's city center according to Numbeo is $1,356 with a range of $1,000 to nearly $1,750.
It doesn't get much better for those who choose to live outside of the city either, only dropping the average cost for a 1 bedroom into the $800 to $1,200 range.
It's suggested that renters spend about one-third of their total monthly income (~33%) on rent, but with new luxury complexes charging sky-high rates & the cost for older units rising, many renters find themselves paying closer to 40% of their monthly income according to the Tampa Bay Times.
This leaves renters with less cash to put towards their first home. Among those who do plan to buy someday, a staggering 70% say they're waiting to purchase because they can't afford all of the costs associated with homeownership, noting that saving for a down payment was the biggest factor.
The current cost of living could also be a contributor to the fact that nearly half of the renters who do aspire to own a home haven't even started saving for a down payment. Of those that have managed to save, 31% of them have less than $5,000 in the bank.
Affordability & having a down payment aren't the only barriers they say are preventing them from purchasing a home. According to the study, other financial obstacles include poor credit, waiting to have a stable life partner, & inability to satisfy additional monthly payments.
Economists have also found loose links between student loan debt & the declining homeownership rates among young adults. 57% of college-educated renters report having exorbitant outstanding debt, & those who do are saving nearly $100 less each month than their debtless peers.
No doubt, this difference adds up quickly. Not only are college-educated, debt-free millennials the most likely to have down payment savings in the bank, but they also average more than twice the total savings of those who are still paying off their student loans.
It appears that homeownership feels out of reach for many young renters across the Sunshine State. Of young adult renters in Orlando, 10% expect to rent forever, while 7.8% of Miamians also expect to be locked into a lifetime of paying their landlords.
This disheartening feeling isn't isolated to just Florida either. Nationally, an average of 12.3% of renters are in the same boat — an increase from 10.7% for renters back in 2018 — with nearly 20% of San Jose, California apartment dwellers feeling chained to an eternity of renting topping the chart, closely followed by 17.8% for Detroit, Michigan.
Not only have renters been unable to save for down payments, but it's also been found that the ability for their families to assist them on their journey to homeownership is on the decline.
While the overall national homeownership rate is on the rise, according to Apartment List's survey, millennial homeownership opportunities have not seen improvements over the last year.
The percentage of millennial renters believing they will rent forever is at an all-time high; while some acknowledge there are benefits that come with renting, the majority say that the main reason they continue to opt to rent is that they simply cannot afford to buy.
Without a drastic turnaround, it seems unlikely that millennial homeownership will catch up with previous generations anytime soon.
You can review the study's findings in full on Apartment List's website here.
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