Boston residents have saved more for a down payment than residents from other areas of the country polled in a recent survey from TD Bank.
The bank’s renter survey polled consumers that currently rent an apartment or home in Boston, looking at how they feel about home ownership, concerns that may keep them out of the housing market and factors that would motivate them to purchase a home.
Saving For A Home
On average, renters in Boston have saved over $10,000 more toward a down payment than other American renters surveyed ($64,505 in Boston versus $51,005 nationally). Forty-three percent of Bostonians reported having saved between $25,000 and $75,000 for a home, compared to 29 percent nationally. Twenty-five percent of Boston respondents have saved $100,000 or more for a down payment, which was significantly more than any other region surveyed, with Philadelphians reporting zero percent and 18 percent of Floridians having saved $100,000 or more.
Renting in Boston
Results show that Boston may begin to be viewed as less attractive for renters due to the high average monthly rent (approximately $1,006) in comparison to the national average (about $916 per person). Fifty-three percent of respondents in Boston reported rising rents as the primary motivation for wanting to purchase a home. Over the past two years, Boston renters have seen their average monthly rent increase $116 per month or $1,400 per year. On average, renters in Boston indicated that they would be willing to pay up to $1,244 per month before deciding it would make more sense to purchase their own home, signifying they are approximately $100 away from making the switch. Sixty-four percent of Bostonians said that they would not want to move to a less-convenient and/or less desirable neighborhood in purchasing a home or apartment.
Homeownership Concerns
Boston renters reported affordability as the biggest factor in whether or not they will buy a home, with fifty-four percent noting that they have not saved enough money or they have too much debt to afford a home. Mortgages are also a large factor in the decision to purchase a home, as 35 percent of respondents reported being unable to qualify or afford a mortgage. When asked about their biggest fears or concerns regarding homeownership, 86 percent of respondents said affordability such as maintenance costs, monthly mortgage payments and utilities was at the top of their list.
“While our survey results reveal that Boston renters have saved more toward a down payment then other Americans, many also said they would probably continue renting over the next two years, possibly as a reflection of the limited inventory and high prices for housing in the area,” Mark Crandall, TD Bank regional market president for Massachusetts, Rhode Island and Connecticut, said in a statement. “Bostonians should consider being flexible when it comes to finding a home in their price range. For example, consider widening the search by looking for homes slightly outside a preferred neighborhood. There are also state and government affordability programs that have down payment options outside a standard 20 percent loan. By broadening their horizons, many more Bostonians may find themselves able to pursue homeownership and avoid the rising cost of renting.”
