With renting gaining more traction nowadays, the American dream of homeownership seems to be increasingly out of reach for the younger generations. Regardless if it’s due to lingering effects of the Great Recession or to the ever-increasing home prices, data shows that 42 of the 100 largest cities had more renters than owners in 2016. But we can’t truly say that owning a home is no longer what the U.S. population wants since a recent survey we conducted found that 63% out of over 2,000 renters want to own a home. Read on to see why some of them are not able to make this dream come true.
Most renters want to own but cannot afford to buy
On the most straightforward level, many renters are indeed in favor of owning a home, but they stick to renting given the high home prices. To be more precise, 38% of our respondents said that they would like to own a home but currently they can’t afford to. The majority of those agreeing with this statement are Millennials aged between 22 and 40 and Gen Xers aged 41-52. As the largest generation of renters, Millennials are burdened with student loan debts more than any other previous generation, and this is certainly a factor contributing to their inability to buy a home. However, unaffordability is not the only reason why there’s a decline in homeownership.
Qualifying for a mortgage is also one of the main obstacles for potential owners, with 21% of renters admitting that they are unable to get a loan. We wanted to look closer at the profile of these respondents and noticed that most of them are Millennials and Baby Boomers. These two cohorts are at a point in their lives where they gained some renting experience, but many have sub-par credit scores, which is detrimental to their plans of becoming homeowners.
16% of respondents believe renting offers more flexibility
When torn between buying or renting a home, another important reason why people choose renting is flexibility. About 16% of those surveyed agree that renting offers more flexibility than owning a home. Being able to leave an apartment whenever you wish to move to another neighborhood or even city is something that many people appreciate. In the case of homeowners, there’s the possibility of selling or renting if you decide to move, but that means wasted time looking for a potential renter or buyer, not to mention the money you’d have to invest for renovations if you ultimately decide to rent it out. Given that incomes are climbing at a slower pace than home prices, many are not willing to pour all their savings into a property that may or may not prove to be a good investment. We have the housing crisis of 2007 to remind us of how terribly wrong things can go for homeowners.
Millennials and Gen Zers, in particular, are usually more attracted to the idea of flexibility given their tendency to change jobs more often and willingness to relocate for work. Therefore, renting is something that offers them this possibility of just packing their bags and moving to another city. Moving in the near future was another reason against owning, given by almost 12% of our respondents.
Renting offers more amenities than owning
It might not be set in stone, but renting does come with several benefits, especially if you’re living in an apartment community. Out of those surveyed, 5% said that they prefer renting because they get more for their money than buying. Indeed, many modern apartment buildings offer impressive amenities like pools, fitness centers, and perfectly-groomed landscaping. There’s also the reassuring feeling that everything’s taken care of, from maintenance to entertainment, whereas owning comes with an array of responsibilities.
Nevertheless, owning does have its benefits as well. One of them is the freedom to redecorate and add amenities as you please. Thinking about turning the house smart? You can definitely do it. However, as homeowners pour more money into trendy gadgets that could soon lose their appeal, renters can make the decision to trade the current home for an upgraded one, without having to invest as much money. Another benefit would be the possibility of having as many pets as you want. Most apartment rentals have several pet restrictions, but your own home can be as pet-friendly as you like.
Only 4% are in the process of buying a home
Although buying a home is an attractive prospect for most people, only about 4% of those surveyed are actually in the process of becoming homeowners.
All things considered, renting is the go-to option for those that can’t afford or don’t want to buy a home and settle down. As previously mentioned, the reasons are varied but at the end of the day, it all comes down to affordability and lifestyle choices.
However, if you’ve already decided that renting is the best option for you, check out RENTCafé for the latest available listings in your area.