More than 79% of residents in Newark, New Jersey, are renters. Cities in New York, Connecticut, and Massachusetts are also home to a high ratio of renters to buyers.
According to IPX1031, 71% of these renters want to purchase a home, so what is preventing them?
A January study by IPX1031 examines the U.S. Census Bureau housing data for 2021 of more than 300 cities to identify the top U.S. cities for a ratio of homeowners to renters and surveys over 1,000 Americans to determine the reasons behind the spread.
The results show a strong concentration of renters is located in the Northeast, while homeownership is highest in the South and West. Money, interest rates, responsibility, and debt load are all reasons buyers are holding back.
Homeownership Across The Country
American cities with a high ratio of homeownership are spread throughout the country. No clear geographic concentration could lend to any discernible trend, but generally, there are more homeowners in the South and West quadrants of the country.
Buckeye, Arizona, tops the list of cities with the highest homeownership rate at 92.39%. Nearly ten percentage points behind Buckeye is Port St. Lucie, Florida, at 83.55%. Sugar Land, Texas (81.49%), Rio Rancho, New Mexico (81.03%), and Centennial, Colorado (79.06%) fill the remaining top five slots.
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Cities in California, Indiana, Michigan, and Kansas also feature on the top 15 list for the highest ratios of homeownership.
Arizona has the most cities on the list with the highest percentage of homeowners. Out of the top 15 cities, four are in Arizona, and three are in Florida.
But while Florida ranks for homeownership, some Floridians are also among the highest ratio of renters in Miami.
A Geographic Trend for Renters
The Northeast has a majority of renters, with nine of the top 10 cities in New Jersey, New York, Connecticut, and Massachusetts.
Newark, New Jersey, has 79.15% renters. Elizabeth and Patterson, New Jersey, take second and third places, respectively, with slightly above 75% of residents renting. New Haven, Connecticut, is fourth with 74.43%, and Hartford, Connecticut, ranks fifth with 71.35% renters over homeowners.
The trend continues with Jersey City, New Jersey; Cambridge, Massachusetts; New York, New York; and Boston, Massachusetts, boasting a ratio of renters significant enough to land them in the top 10.
There are plenty of for sale signs scattered about the Skyline Mobile Home Park in Torrance on August 24, 2022. (Photo by Brittany Murray/MediaNews Group/Long Beach Press-Telegram via Getty Images)
The outlier among the geographical pack is Miami, Florida, ranking 8th overall with a ratio of 69.59% renters.
Further down the list, the demographic spread continues, with cities in California, Utah, and Texas appearing in the top 15 rankings.
Some of these tenants have been living in their rentals for many decades. New Yorkers rank in the hundreds of thousands (415,817 to be exact) and land a secure first-place ranking for the city with the most tenants that moved in over 22 years ago.
Los Angeles, Chicago, San Francisco, and Philadelphia also rank in the top five, with long-term tenants ranging in numbers from 14,511 to 82,559.
Why Americans In The Northeast Aren’t Buying
According to the IPX1031 survey, 71% of renters want to buy a home, but they are prevented for a few key reasons.
The majority, 90% of those surveyed, say money is a factor, while 35% of respondents report interest rates as the main preventer. The survey also showed that 19% of respondents say they do not want to take on debt. Respondents also said they do not want to take on the responsibility of homeownership (14%), and 10% said that they have not yet found the right home.
The results from the survey suggest that while obstacles exist for many renters, nearly a quarter anticipate buying in the short to medium term.
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Of those surveyed, 23% expect to buy a home in the next two years. The most popular timeline for renters is in five years, which 30% of respondents disclose as their planned purchase time.
Renters looking to buy in three to four years make up 15% of the group, and those waiting six to nine years equal 12%. One-fifth of renters say they will wait ten or more years before considering buying a home.
The data shows a geographical spread of homeownership across the country but a clear concentration of renters in the Northeast. Money is the key factor determining whether or not renters will buy in these particular areas. Of those considering homeownership, most plan on getting into the housing market in five years.
This article was produced by Wealthy Living and syndicated by Wealth of Geeks.