Not only are more people renting today, more are doing this by choice. The reason? Housing prices and interest rates are making owning a single-family home more expensive than ever. And many consumers are choosing to avoid these costs by renting instead of buying.
That’s one of the key findings from a new survey by investment and management firm Knightvest. Knightvest conducted its poll from Nov. 20 to 30, surveying more than 4,100 U.S. apartment renters.
One of the more surprising results? A resounding 59% of respondents said that they choose to rent. Of course, that also means that 41% told Knighvest that they feel compelled to rent because of the prohibitive cost of homeownership. Breaking it down further, 51% of Millennials and 54% of Gen Z said that they willingly embrace the rental lifestyle.
The top three reasons for renting given by survey respondents:
- The ever-increasing expense of homeownership (acknowledged by 62% of respondents)
- The allure of reduced maintenance and repair duties (claimed by 51%)
- And the flexibility to uproot and relocate at will (a factor for 35%).
In a surprising twist, 31% of renters express either ambivalence or disinterest in homeownership altogether.
“The decision between renting and buying has become increasingly nuanced within this dynamic macroeconomic environment,” said David Moore, founder and chief executive officer of Knightvest. “It’s intriguing to see our data align with the anecdotes we hear from residents. When communities are built on quality, service and care, apartments transform into coveted havens where residents not only live but thrive across various stages of life.”
Another interesting fact? A total of 29% of renters surveyed said that had owned a home in the past. Among Baby Boomers in the rental sphere, a substantial 71% have previously owned a home, with their decision to move to renting attributed to the appeal of fewer maintenance hassles.
The survey found that Gen Z is slightly more enthusiastic about homeownership than their Millennial counterparts, with 29% of the younger generation saying that they are enthused about owning a home while only 25% of Millennials said the same.
The survey also highlights how difficult buying a home today, with 74% of respondents admitting that their dream of homeownership has been pushed further away by the rise in mortgage interest rates. Of this group, 79% reveal that their homeownership timeline has elongated by several years or indefinitely.
How much money do different generations think they need to own a home? According to Knightvest’s survey, Millennials say that they need a yearly income of $139,000 to afford a home today, while Gen Z follows closely with a reported requirement of $137,000.
