Along with a declining rate of homeownership, analysts
have noted over the last few years that fewer Americans appear to be heavily
invested in the dream of owning a home. New
research from Freddie Mac gives more credence to what a company official calls
a historic shift in the preferences of older consumers.
Freddie Mac’s spring edition of its Profile of Today’s Renter finds that
affordability is driving the rent-versus-buy decision process. Sixty-seven percent of renters who responded
to the Profile survey viewed renting as more affordable than owning, including some
of those in age groups that have long had the highest homeownership rates. Among Baby Boomers, who are now aged 53 to
71, 73 percent of those who are non-homeowners said renting was more
affordable. Sixty seven percent of those
renters who said they plan to continue as renters cited financial
considerations as the reason, up from 59 percent in 2016.
Half of the Boomer renters said they did not
anticipate buying a home in the future, eight points higher than responses in
the previous survey conducted in August 2017. Of those, 35 percent have no interest in
owning, and 15 percent believe they will never be able to afford it.
Similarly, 31 percent of Gen Xers (aged 38-52) said they would continue
to rent, up from 28 percent previously. Of those respondents, 19 percent lack interest
in buying and 12 percent believe they will never be able to afford it.
David Brickman, executive vice president and head of Freddie Mac Multifamily,
said “Perceptions of affordability and cost continue to play an outsized role
in the choices of America’s renters, as they overwhelmingly see renting as more
affordable and the right choice for them – right now. Remarkably, half of baby boomers who rent do
not anticipate owning a home in the future, with a growing number of Generation
Xers following suit. Indeed, we are witnessing an historic shift in preference
among older Americans, as they increasingly are choosing the size, convenience
and affordability that renting offers over ownership.”
Even though the survey found a growing number of renters who said their
economic situation has improved since the last survey, it also noted
affordability was more of a concern. The
67 percent of renters who plan to continue renting for financial reasons is
even higher among Millennials, those 21 to 37 years old. Seventy-four percent of that cohort expressed
that opinion, up 15 points since 2016.
The percentage of multifamily renters (versus single-family renters) with
that view jumped from 57 percent in 2016 to 68 percent today. While the increase was apparent for all
locations, it was more apparent among urban renters.
Sixty-six percent of renters are moderately or very satisfied with their
renting experience, the highest such responses since 2016. Among those who had experienced rent
increases, 64 percent said they like where they live and have no intention of
moving. This response was significantly
higher (70 percent) among Boomers than Millennials (59 percent.)
Most renters – 54 percent – continue to believe that renting is a good
choice for them now, including 71 percent of millennials.
A companion survey found that cost concerns also play a major role in
mobility and housing choices. In that
survey 64 percent of renters said price was the most important factor when considering
their next home. This answer was
consistent across all age groups. It was also noted that, again regardless of
age group, more renters perceived homeownership as less accessible than they
did three years earlier. Eighty-one
percent of renters thought it would be difficult for them to buy a home, as
compared to 38 percent who believe renting a home is difficult. Plans to
continue renting remain relatively constant, with a majority (55 percent) of
renters indicating they plan to continue doing so.
Renters living in the West have more issues of affordability than other
respondents. Sixty-four percent said they are spending less on other essentials
because of increasing rents. This was at least nine points higher than
responses in any other region. Those renters also perceive homeownership as
more difficult to attain than other regions, with 51 percent believing
homeownership is less accessible than three years ago.
Brickman added, “Renter satisfaction remains high, but the continued
shortage of supply and growing demand means more renters are looking at cost
than ever before. Although it’s clear that the demand for rental housing will
continue for the foreseeable future, this survey is also a reminder of the
important role we play in financing low-income and workforce housing across the
The Renter Profile survey was conducted in February among 4,115 adults
including 1,209 renters. The companion survey involved 2,600 respondents both
owners and renters and took place in late November and early December
2017. Both surveys were conducted