New Study: 10.2% of Florida millennials plan to “always rent” and forgo purchasing home altogether
A new study by Apartment List finds that 10.2% of Florida millennials plan to “always rent” and forgo purchasing a home altogether. This statistic is up from 8.4% in 2018.
The study reports findings from 34 metros nationwide, including Florida metros of Tampa, Orlando and Miami. Tampa surpasses the state and national (12.3%) rate of “always rent” millennials, with 14.9% of the metro’s millennials planning to rent forever. Millennials are much more optimistic about homeownership in Orlando and Miami, where only 10.2% and 7.8% of millennials plan to forgo homeownership, respectively.
These are significant but modest shares, particularly when comparing the sunshine state metros to that of San Jose, Detroit, St. Louis, and San Francisco, where more than 17% of the millennial renters plan to exclusively rent.
Affordability is the biggest factor in millennial’s decision to forgo homeownership: 65.7% of Florida’s “always rent” millennials say renting is the only form of housing they can afford, compared to 69% nationwide.
Affordability is also the largest obstacle for Florida millennial renters who want to eventually own a home. Among the state’s aspirant homeowners, 70.6% are waiting because they cannot currently afford to buy; most notably due to the cost of a down payment.
It’s understandable why millennial renters are concerned about affording a down payment. Putting down 10-20% of a home’s value is no small feat, particularly in metropolitan areas like Miami, FL, where the median price for a condominium was nearly $200,000 in 2018.
Despite financial pressures, the majority of millennial renters in Florida still want to one day own their own homes. Yet, unfortunately, have made little to no progress in savings towards a down payment.
In Orlando, 53% of millennial renters interested in purchasing a home have not started saving towards a down payment, compared to 44% and 43% in Tampa and Miami, respectively.
Nationwide, 48% of millennial renters who aspire to buy a home have no savings set aside for a down payment, while 31% have less than $5,000 saved:
Furthermore, Apartment List estimates only 25.1% Florida’s millennials (and 25% nationwide) will be able to afford a 10% down payment on the median-priced condo in their metro area within the next 5 years.
In part because of the slightly higher savings rates described above, 30% of millennial renters are on-track in Miami:
The study also highlights another major obstacle to millennial homeownership: student debt.
Currently, 57% of college-educated millennials in the U.S. report having outstanding debt. Debtfree millennials are saving roughly $100 more each month for a down payment. These incremental savings make a difference because, on average, debt-free millennials have twice the total down payment savings than their debt-burden peers.
The savings discrepancy is further exacerbated across the state of Florida; not only are Florida’s college grads with student debt less likely to have down payment savings (45.7%) than graduates with no debt (59.5%) but even those with no college degree whatsoever (52.6%).
In fact, the study estimates if debt payments were instead put towards savings, the share of Florida millennial renters ready to buy in the next 5 years would rise from 30% to 43% in Miami and 25.1% to 36.7 statewide.