In a sign that consumers may be shifting preferences from renting to homeownership, a new TransUnion analysis found that 55% of those who shopped for a mortgage in Q1 2017 were non-homeowners – most of whom are renters. This is a significant rise from Q1 2016 (50%) and Q1 2015 (45%). The results of the study were featured at the National Apartment Association Education Conference & Exposition.
TransUnion’s report found that millennials’ interest in homeownership is growing steadily over time. In 2017, three in 10 (29%) non-homeowners who shopped for mortgages were millennials, up slightly from 28% in 2016 and 27% in 2015.
In addition, 34 million renters between ages 25 and 44 – typically a prime age range for homeownership – were credit eligible for a mortgage. Just 36% of renters under 44 years old had a VantageScore® 3.0 credit score below 580, a common benchmark used by some institutions to determine whether a borrower qualifies for a low down payment loan.
A prior TransUnion survey of renters found that more than half (51%) would be more likely to choose a property if they knew their landlord would report their rental payments to credit bureaus. Nearly eight in ten (79 percent) survey respondents said they prioritize rental payments above all other monthly bills.
Property managers use TransUnion’s ResidentCredit to report the amount and timeliness of a monthly rental payment, or any balanced owed for a payment. Renters’ payments appear on their credit report along with other financial obligations. Some consumers, especially subprime consumers, may experience an increase in their credit score as a result of on-time payments being reported.
Source: TransUnion Press Release