Affordability Continues to Drive Renter Demand
October 25, 2017
According to new research commissioned by Freddie Mac, affordability and changing attitudes towards renting are playing a significant role in the growing demand for rental housing. The new study, conducted by Harris Poll, finds that an increasing number of America’s renters are satisfied with their living situation and consider it the most affordable option for the foreseeable future. More renters believe this despite their view that housing prices—both to purchase and rent—continue to rise and supply continues to tighten.
The survey finds that a large number of renters view renting as an option that fits their lifestyle, and a strategic choice at many life stages. Nationally, those who believe that renting is more affordable has increased to 76 percent from 68 percent since Freddie Mac’s last renter survey in March, 2017.
Changing Perceptions Towards Renting
The survey finds an increasing number of renters view renting as a good choice for them, increasing in August to 57 percent compared to 52 percent in March, 2017. Over half of renters – 58 percent – believe that “renting fits my current lifestyle,” including 63 percent of Young Millennials (ages 21-27) and Baby Boomers ages (53-71). Moreover, 55 percent see renting as a strategic choice at many life stages, with 45 percent of Younger Millennials, 51 percent of Older Millennials (aged 28-37), 56 percent of Generation X (aged 38-52), and 68 percent of Boomers sharing those views.
A Majority View Renting as the Far More Affordable Option
“Our rental survey confirms what we’re seeing in the market—that a growing number of individuals across demographic groups view renting as more affordable and better suited to their current economic situation."
Executive Vice President, Multifamily Business
Bolstering these perceptions are evolving views on affordability. While more than seven out of 10 renters view renting as more affordable than owning generally, perceptions of renting as more affordable have increased across all generations as well. In fact, since September of 2016, the view that renting is more affordable has increased by more than 10 percentage points among Millennials (66 percent to 76 percent), Generation X (56 percent to 75 percent) and Baby Boomers (71 percent to 82 percent).
While owning a home continues to remain an aspiration for many, the financial realities of cost and tight inventory make renting the more practical option. An increasing number of renters believe it will be more affordable to rent than to own in the future. The number who view renting as more affordable in the next 12 months increased to 25 percent from 20 percent in March, 2017, while the number who believe buying a home would become more affordable decreased to 15 percent from 18 percent over the same period.
Views on the Rental Experience Remain Positive
Overall, satisfaction with the rental experience remains high and largely unchanged. Approximately 60 percent of renters express satisfaction with their overall rental experience. While 41 percent of those surveyed cited affordability as the primary driver of their renting decision, one-third (33 percent) said buying a home is just not a priority at the moment.
The survey also explored views about rental housing as it relates to working life. About half of renters (56 percent) express high satisfaction with their commute. However, a much higher percentage (76 percent) indicated they are at least somewhat willing to move to a smaller property to live closer to work.
Additional details about the research are available here.