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Here’s why Americans Preferred Home Renting Over Buying 10 Years Back

Affluent Americans Chose ‘Lifestyle’ Renting Over Buying in the 2010s

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Renting home
The 2010s saw the largest increase in the percentage of home renting in USA. (Representational Image). Pixabay

By Dora Mekouar

After living in a Washington, D.C., suburb for 20 years, Patrick Harrington had had enough. Fed up with the 25-mile commute to work, the Virginia man, along with his wife, Francine, sold their home and moved into a rental located about a 15-minute walk from Patrick’s work.

“I went from an hour-and-a-half drive every morning to a 15-minute walk,” Patrick says. “We’ve definitely undergone a lifestyle change. No doubt about it.”

The Harringtons exemplify a key housing trend of the 2010s, a decade that saw renting emerge as a choice. The days of people being forced to rent until they can afford to buy appear to be over for many. An increasing number of more affluent Americans are opting to rent as a way of life.

“Renting became a lifestyle option this past decade,” Michaela Buzec, a research analyst for RENTCafe told VOA via email. “It offers flexibility and freedom to move around and change neighborhoods or cities. It’s also a matter of affordability, since home prices in big, desirable cities increased significantly. This trend is scattered throughout the country, but it’s most evident in the expensive markets.”

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Patrick and Francine Harrington in front of their Washington-area rental home. VOA

That’s certainly true for the Harringtons, empty nesters who moved to a trendy, historic, more urban location that also happens to feature some of the Washington area’s highest home prices.

“[The rent] is way more than my mortgage, actually probably 50% more than my mortgage,” says Francine, who considers herself more financially practical than her husband. “So, you know, I was debating [the move], although our transportation [costs] have been cut — tolls, gas, wear-and-tear on our cars.”

The 2010s saw the largest increase in the percentage of renters since the 1960s, according to RENTCafe, an internet service that lists rental properties. More than 100 million Americans live in rental units. Since 2010, the number of renters increased twice as fast as the number of homeowners. There are 74% more people renting today than in 1960.

“Advantage-wise, it’s incredibly convenient,” Francine says of the rental home they’ve been in for almost a year. “Walking distance to Patrick’s job and to stores and entertainment places, restaurants and stuff. So it’s very convenient. I ride my bike a lot more. Patrick walks a lot more.”

“We want to take more and more advantage of it now that we’re empty nesters,” Patrick adds, “so, yeah, definitely lifestyle is definitely part of the equation, but for me it was 99% work related.”

The number of renters increased “across the board,” among the young and the old, in urban areas as well as the suburbs. RENTCafe, which studied data from the past decade, found reasons for the increase include high student loans and home prices, and the need to be flexible in a changing, growing job market.

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Here’s a graph showing the number of home renters in USA. VOA

Twenty cities went from a homeowner majority to a renter majority in the past 10 years, including places like Detroit, Michigan; Dayton and Toledo, Ohio; Stockton, California, and Memphis, Tennessee. Today, the cities with the largest share of renters are in the American Northeast.

“Perhaps the most surprising aspect is to see cohorts traditionally oriented towards homeownership give up this status and willingly start renting,” Buzec says. “These include seniors and high-earning Americans, who see renting as the better option for their situations. This fact supports the most prominent trend of the decade, that of renting as a choice, more than simply a solution.”

For the Harringtons, renting means they didn’t sweat it when a major appliance broke down or when heavy rains flooded the basement. As renters, they stood by while the owner took care of both problems. In addition, both appreciate living without all of the junk they’d accumulated in their old house.

But how long they’ll continue to rent remains an open question.

“Well, we have two schools of thought here,” Patrick says. “I could see ourselves renting for a good longer period than Francine does.”

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Whether the “renter-by-choice” trend will continue into the 2020s remains to be seen. Looking ahead to the next decade, Francine isn’t sure what the best option will be for her and her husband.

“I don’t know if I would buy,” she says. “I’m kind of, right now, on the bubble. Maybe I would just look for a slightly cheaper place to rent, because I don’t know how long Patrick’s job will be…I’m really on the fence on it.” (VOA)

Next Story

This Decade to be Good for the Financial Health of Millennials

2020s Could Be Decade Millennials Finally Get Ahead

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Millennials
Share on Facebook Share on Twitter Share via Email Print this page The 2020s might be the decade faltering millennials finally roar to financial health. Pixabay

By Dora Mekouar

The 2020s might be the decade faltering millennials finally roar to financial health and lifestyle after a tough start brought on by the Great Recession, which lasted from 2007 until 2009.

Coming of age during the worst economic downturn in the United States since the 1930s meant that many of these young people, who are now in their mid-20s to late-30s, experienced a delayed entrance into the job market or accepted lower-paying jobs for which they were overqualified.

Many millennials were hard hit due to a variety of factors, including high unemployment, student loan debt, and an increased cost of living, particularly if they graduated from high school or college during the downturn.

Millennials
Millennials Andy and Stacie Proctor stand in their new home in Vineyard, Utah. VOA

“Since then, we’ve really had a lot of wage stagnation, particularly given that so many millennials started behind where they thought they would be,” says Jason Dorsey, president and lead millennial researcher at the Center for Generational Kinetics. “And it’s taken them longer to recover — if they have recovered.”

Experts also say U.S. millennials are the first generation to feel the full impact of decades of rising inequality in America.

A recent study found millennials are significantly financially worse off than previous generations were at the same age. Since 1996, the net worth of people under 35 has dropped by more than one-third, or 34 percent.

But things could be looking up for these younger Americans now that the average U.S. millennial is over the age of 30 and poised to enter the wealth-accumulation stage of their life.

“They’ve had a lot of time to learn about what it takes to succeed? What are the kinds of decisions that lead to the outcome that you want?” Dorsey says. “And for many millennials, boomers [people aged 55 to 75] are finally going to transition increasingly out of the workforce, which is going to create opportunity for them to actually move up into more management-style roles.”

Millennials
Juan Hernandez, 25, is among millennials nationwide with student debt who are worried about being able to qualify for a loan and come up with a down payment for a home. VOA

Millennials are at the age when Americans traditionally buy homes, start saving for the future, and invest for their retirement. It also will help that many have paid down their student debt now that they’ve been out of college for a number of years.

“And at the same time, many of them will become potentially two-income households and that’s also really helpful for many of them,” Dorsey says. “It’s sort of a perfect storm. It just happens to align with the 2020s. It’s not that the 2020s are this famous decade, but more so that millennials are hitting the times when they should start really saving and investing, and earning higher incomes relative to their spending.”

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And if millennials blame previous generations for their current financial straits, it might cheer them up to know this is also the time many of them can expect to start inheriting wealth from their more well-off baby boomer parents or other relatives. (VOA)