The new American Dream: More opting for renting over homeownership
A new report finds people are choosing to rent even though they could afford a home A survey conducted by Utah-based property management software innovator Entrata has found that more people are choosing to rent because they want to, not because they can't afford to own a home. The survey, conducted in January, found 66% of renters say renting fits their current lifestyle more than owning a home, and a third say they could afford a home in 2024 that meets their needs but choose not to buy. The report, titled "The New American Dream," found that while renters are still renting due to their choice of location flexibility, prime amenities offered in their communities and the ability to live life on their terms, they are making the most of these experiences. The study also found that 1 in 5 of these renters expect to be lifelong renters.
Published : a month ago by Dennis Romboy in Lifestyle
A sign reading “For rent” in Salt Lake City on Saturday, Feb. 10, 2024. The survey of 2,000 renters in large apartment communities nationwide conducted in January found 66% say renting fits their current lifestyle more than owning a home.
That’s a question facing many Americans in a continually tough housing market. But new data from Utah-based property management software innovator Entrata show more people are renting because they want to, not because they can’t afford to own a home. And, in fact, 1 in 5 expect to be lifelong renters.
“While there will always be a certain percentage of the population that are renters by default because of their economic situation, steadily more people are becoming renters by choice regardless of economic factors,” according to the report titled “The New American Dream.”
The survey of 2,000 renters in large apartment communities nationwide conducted in January found 66% say renting fits their current lifestyle more than owning a home. A third say they could afford a home in 2024 that meets their needs but choose not to buy.
According to the Entrata report, the outdated notion that renters are either too young or financially unable to buy a house is a thing of the past. For many apartment residents, homeownership isn’t part of the American Dream. The survey found 41% of renters say it has nothing to do with homeownership. They’re increasingly expecting to rent for the long haul as they invest in other areas to build their quality of life.
• Forty-one percent of renters say their American Dream has nothing to do with homeownership.
• Sixty-three percent think they have a similar or better quality of life than their parents at a similar age.
• Twenty percent expect to be lifelong renters, an increase of 33% from 2021.
• Twenty-three percent like the location flexibility renting gives them.
• Seventeen percent like the financial flexibility of not being tied to a mortgage.
It’s not about the money
“Today’s apartment residents are reshaping the traditional American Dream to fit what’s most important to them, including flexibility, prime amenities offered in their communities and the ability to live life on their terms,” Adam Edmunds, Entrata CEO, said in a press release. “Many renters no longer see the need to be tied to a home and a mortgage when apartment communities provide everything they need. Experiences seem to be at the core of the new American Dream and renters are making the most of them.”
The report notes renting gives people the flexibility needed to fit their lifestyle — whether that be the financial freedom of not being tied to a mortgage and the upkeep of a home or the ability to move more easily than if they owned a home. Also, where remote work is more available to many post-pandemic, renting has become increasingly attractive.
Entrata found that 46% of renters have the financial means to pursue their hobbies and 65% are happy with the direction of their career, with 73% seeing a path to pursue their career goals. Nearly three-quarters of renters are spending their discretionary money on things like dining, travel and entertainment such as concerts and sporting events.
Renters are also looking to alleviate themselves from the responsibilities that come with home ownership, including yard work and maintenance. Another chunk owned a home and realized it wasn’t for them, according to the report. Some of the top reasons survey respondents cited for beginning to rent again include moving and divorces or breakups. And that varied among age groups. For millennials, near half started renting because they moved to a new area, while 38% and 32%, respectively, of Gen X and baby boomers experienced a divorce or breakup.
The report says apartment living doesn’t mean renters are averse to the idea of community. They still want to be good neighbors, host friends and family, and value meeting and befriending new people in their community. Two-thirds say they have helped their neighbors, 61% say their neighbors have helped them and 40% have used communal spaces for social gathering and just over a third have friends or family over at least once a month.
Because renters by choice don’t have to worry about saving for a down payment or being “house poor” after buying a home, their investment strategy differs greatly from homeowners, according to the report. Nearly half prefer to have their savings in investments that are easy to liquidate rather than real estate, while more than half say they’re prioritizing paying off debt right now rather than saving.
Entrata compiled the report using an online survey prepared by Method Research and distributed by PureSpectrum among 2,000 U.S. renters in large 50-plus unit apartment communities from Jan. 3-12.