For many in the housing industry, there are a myriad of discussions as to why Millennials are not making the move into home ownership. Reasons listed include the economy, student loan debt and struggling to save for a down payment. While these might have some bearing on their decision to remain renters, others have decidedly different reasons for remaining in the rental market. Rent.com conducted a survey to provide renters guide by asking renters why they still rent and the results were surprising.
Renters guide 1: Affordability
One such reason is the affordability. While rents have seen sharp increases over the past several years as demand has increased faster than available inventory, rents have remained affordable in comparison to mortgage payments. In fact, when looking for their next rental home, many site affordability as one of the primary criteria of their search.
Others cited the ability of inherent freedom in renting. After all, it is much easier to pick and move with a lease versus being tied down in one place with a mortgage. For younger renters, the flexibility in a one year or a lease that allows sublets is more desirable than owning a piece of the America dream.
When you are the owner, all the repairs are your responsibility. Every clogged toilet, roof leak or insect problem must be cared for in your already busy schedule. Renters, on the other hand, are in a position to shift that responsibility to their landlord. Thus all the costs and demands of maintenance are reduced to placing a call to the landlord. While small home maintenance might be done by the renter, most of the fixes can be handled by someone else during working hours without a renter needing to wait around the house.
Being able to live in a great location is often easier from a renting perspective versus purchasing. While it might mean the rents are higher, they are often still more affordable than a mortgage payment for the same space. For those to whom location overrides all, this might be the most important reason to remain a renter.
Renters guide 2: Life situations
The 2nd renters guide is life situations, such as still being a college student, can also make renting sensible. After all, without the knowledge of how your career will take you in terms of location, it makes sense to hold off on purchasing to avoid being stuck with real estate in the wrong city. Those renters also might simply be unwilling to make a commitment, especially for those who recently moved to a new city. Leases allow for exploring neighborhoods to find the one that is a perfect fit prior to making a home purchase.
Renters guide 2: Mortgage
The final reason is probably the most critical. There are a vast majority of renters who simply cannot get a home mortgage. While this is partially due to the changes in banking requirements as part of the boomerang of the recession, it is also a reflection of wages that have remained flat and significant long term debt that reduces disposable income.
Many renters would site one or several of these reasons for why they have chosen to rent versus buying. In the end, whatever a renter’s reasons, the result is a continually high demand for rental housing versus housing inventory for purchase.