Today, the average age of renters continues to climb well into the mid-30s, leading to home ownership going down, even as rental prices go up.
There are quite a few reasons why renting seems to be be more attractive than buying to millennials:
- Increased popularity of the “nomad” lifestyle or staying in a city for a short time before moving to a different one.
- Larger amounts of pre-existing debt.
- Focus on other investments that have a higher expected return.
- According to Chris Copley of TD Bank, “Ten years ago, debt-to-income ratios were in the 50 range without issue, now it’s a hard stop at 43.” Getting a mortgage is harder now than it was in the early 2000’s and before.
- Post-housing bubble, many of the single- and multi-family buildings that were purchased are now being rented to tenants. This has led to an increase in rental inventory, and can also be paired with an 11% decrease in (purchased) home inventory this year to explain an increase in renter households.
To add to our never-ending journey to make apartment hunting suck less, we’re looking to learn why you continue to rent instead of buying a home at your current life stage. Send an email to email@example.com with your country, city, state, age, and a little bit about your current living situation and why you rent. We’ll be using the best ones in an upcoming post about renting vs. buying. Can’t wait to hear from you!