New Research Finds Increasing Preference for Renting
New research by Freddie Mac reveals that despite growing economic confidence among renters, affordability remains dominant in driving renter behavior. The spring "Profile of Today's Renter" finds a total of 67 percent of renters view renting as more affordable than owning a home, including 73 percent of Baby Boomers (aged 53-71). Similarly, 67 percent of renters who will continue renting say they will do so for financial reasons—up from 59 percent just two years ago.
Conducted by Harris Poll, the survey finds half (50 percent) of Baby Boomers currently renting do not anticipate buying a home in the future, up eight points from the previous Profile taken six months ago. Of that half, 35 percent have no interest in owning, and 15 percent believe they will never be able to afford it. Similarly, 31 percent of Generation Xers (aged 38-52) expressed that sentiment, up from 28 percent from the previous profile. Of those respondents, 19 percent lack interest and 12 percent believe they will never be able to afford it.
Although the Profile finds a growing number of renters believe their economic situation has improved compared to last summer, it also finds that cost is increasingly driving rental decisions. While 67 percent of renters stated they will continue renting for financial reasons, that number is significantly higher for Millennials (aged 21-37), jumping 15 points from 59 percent in 2016 to 74 percent. Multifamily renters (versus single-family renters) expressing this view jumped eleven points - from 57 percent in 2016 to 68 percent today. And although this increase takes place in all geographic areas, urban renters are increasingly likely to continue renting for financial reasons.
As part of the Profile, a companion survey conducted by GfK Custom Research was also released today, finding that cost concerns play a major role in mobility and housing choices. The study shows a significant majority, 64 percent, of renters cite price as the most important factor when considering their next home, a theme consistent across all generational cohorts.
Rental satisfaction continues to run high. A significant and growing majority of renters – 66 percent – are satisfied with the overall rental experience, up from 60 percent in August of 2017. Even among renters who have experienced a rent increase in the past two years, a growing number – 64 percent – stated they do not plan to move, up from 49 percent in August 2017. This includes a noteworthy 70 percent of Baby Boomers. In addition, a majority of renters – 54 percent – continue to believe that renting is a good choice for them now, including 71 percent of Millennials.
Renters in the West Facing Added Difficulty
The Profile also shows renters living in the western United States with increasing issues related to affordability and the cost of living. Those living in the West feel the impact of rent increases more than other regions, with 64 percent saying they are now spending less on other essentials due to changes in their rent—which is at least nine points more than any other region. Additionally, renters living in the West perceive homeownership as more difficult to attain than other regions, with 51 percent believing homeownership is less accessible than three years ago.