More People Work in the Gig Economy Than You Might Think – and Many Want to Own Homes
The online, on-demand economy for services such as ride sharing, accommodation sharing, and others – known as the gig economy – is growing. Through Fannie Mae’s third quarter National Housing Survey®, we sought to understand the extent of that growth and how it may impact attitudes towards homeownership. The survey found that nearly one-fifth of American adults have provided a service through the gig economy. At the same time, while gig economy workers are generally more optimistic about their financial position overall and aspire to own a home, gig economy workers who rent are less optimistic than non-gig economy workers who rent that they will buy a home on their next move.
As a growing part of the workforce, gig economy workers generally have full-time employment, are college educated, use the gig economy to supplement their income, and make about $50,000 or more per year in total. Most gig economy workers have only offered one service, but Millennials are more likely than older age groups to have offered more than one gig economy service. Gig economy workers more frequently offer ride sharing and handyman/babysitting services, though about one-quarter offer accommodation sharing or food delivery services. Most gig economy workers are motivated by the possibility of earning additional income or being their own bosses. Gig economy workers report increased household incomes and have a more positive financial outlook than non-gig economy workers.
Nearly one-fifth of American adults work in the gig economy. Most are employed full-time and college educated, about half make $50,000 or more per year. (click image to view full size)
Gig economy workers report increased household incomes and have a more positive financial outlook than non-gig economy workers. (click image to view full size)
Gig economy workers who rent are about as likely as other renters to prefer homeownership to renting, but they are less likely than other renters to think it is a good time to purchase a home or to say they will buy a home when they next move. This comes despite evidence that the vast majority of gig economy workers who rent expect to buy a home at some point in the future. Indeed, most gig economy workers who rent think it would be difficult to get a mortgage and cite down payment and credit as the biggest obstacles to getting one. One area for further research is to determine to what extent current underwriting standards sufficiently account for the potential of gig economy income to supplement other full-time income sources. And the salience of this research question will grow if gig economy participation continues to grow.
Gig economy workers who rent are about as likely as other renters to prefer homeownership to renting. (click image to view full size)
Gig economy workers who rent are less likely than other renters to say they will buy a home when they next move, though a vast majority expect to buy a home at some point in the future. (click image to view full size)
Tom Seidenstein & Sarah Shahdad
Market Insights Research, Economic & Strategic Research Group
December 5, 2017
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