Rent to Homeowner Journey

Goals

Gain an understanding of the journey from rent to homeowner in the US, including information on how many renters are saving for a home or down payment, how many first time homeowners are renting before buying a home, in order to size the market for a fintech product that helps these renters save for their first home down payment.

Early Findings

While there was not direct data available showing specifically how many renters are saving for down payment, we did find the following secondary data, which gives insights into the potential market size for a product that would help renters save for their first home down payment.
  • Of all home buyers, 37% were previously renting a house or apartment.
  • Most Americans (81%) are prioritizing at least one other financial goal, such as paying of student loans or travel over home ownership.
  • 13% of potential home buyers say saving for the down payment is the most difficult step towards purchasing a home.
  • Home purchases are delayed on average 3 years due to time spent saving for a down payment, with the most common challenges to savings being student loans and credit card debt.
  • 35% of Americans rent their primary residence, but only 17% prefer renting over owning.
  • A third of Americans who prefer renting note they rent because it feels more affordable.
  • Changes in lifestyle and improved financial situations tend to motivate people more than increased rent costs to purchase a home.
  • The primary reason for non-homeowners to not own a home was a perceived inability to afford it.
  • Over half of non-owners believe they can't afford to buy a home.
  • Only 15% of renters would try to buy a home if their rent increased, vs. 42% who would resign their lease, and 25% who would move to a cheaper rental.
  • In the US in 2019, there were an estimated 43 million rental units occupied by renters.

Proposed next steps:

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