SAVI Reports - Page 17

Families and households with high incomes may have flexibility in determining whether they prefer to buy or rent their homes, where they want to live, what amenities they want to live near, choice between sources of financing, and the ability to save through purchasing less housing than they can afford. On the other hand, low-income families have little of that flexibility and may have their choices further limited by the consumption patterns of those with higher incomes. The decision of a particular family to rent or purchase their housing relates to the broader market and their individual situation but is also tied to the economy beyond the housing market. To Buy or Rent? The decision of a particular family to rent or purchase their housing relies on many factors that relate to the broader market and their individual situations. These wideranging market-based factors are tied to the economy (beyond the housing market) as well as macro-drivers of housing supply and demand, which includes current interest rates and lending practices. Individual factors include a family’s current savings, current and projected earnings, the length of time the family plans to stay in one place, and costs beyond the mortgage or monthly rent (e.g., property taxes and homeowners association dues for homeowners, and security deposits or maintenance fees for renters), as well as other factors. 13