The American Dream has always included homeownership, but, in the face of an unpredictable housing market, attitudes toward renting are beginning to change.
According to a new report by Knightvest, consumer sentiment toward renting their home for the long term is beginning to shift—primarily due to high mortgage rates and generational preferences.
“The rent-versus-buy decision is increasingly nuanced given this dynamic macroeconomic environment,” David Moore, Knightvest founder and CEO, said. “It’s interesting to see the data support what we’re hearing anecdotally from residents: If you create communities built on quality, service, and care, then apartments can become sought-after destinations where residents thrive through multiple seasons of their lives.”
Per Knightvest data, more than half (59%) of surveyed renters say they choose to rent, rather than feeling like they are forced to rent. Interestingly, 31% of renters indicated that they feel ambivalent or disinterested in homeownership altogether.
The reason? Cost efficiency and flexibility.
Higher costs of homeownership was the most cited downside to owning a home, with 62% of respondents indicating this was the No. 1 reason why they chose to rent instead of own. Just over half (51%) of renters say that lower maintenance and repair responsibilities was a major draw toward renting, and 35% cited the enhanced flexibility to relocate.
Higher mortgage rates have also played a significant role in changing attitudes toward renting, with 74% of respondents saying mortgage rates have delayed their home buying decision by at least a few years. Of those, 79% report that their plans to buy a home have been lengthened by at least a few years or indefinitely.
The survey reveals an interesting shift in attitudes toward renting on a generational basis, too.
Fifty-one percent of millennial respondents said that renting was a choice, rather than a forced decision, and only 25% expressed excitement toward the idea of homeownership.
Gen Z respondents seemed a little more excited at the prospect of homeownership, with 29% indicating a willingness to purchase a home.
On the other hand, the majority of baby boomers (71%) said they owned a home prior to renting. Their top reason for switching to an apartment was lower maintenance and repair responsibilities.
Baby boomers also tended to value the community aspect of renting. Seventy-eight percent of baby boomers said they valued social interaction within rental communities.
“As we head into 2024, this data underscores the enduring demand for apartments and reveals insights that will continue to shape the real estate landscape for years to come,” Moore said. “At Knightvest, we remain focused on executing our strategy to renovate and reposition apartment communities to create compelling, modern living environments at an extraordinary value. With people staying in apartments longer, this work has never been more important than it is today.”
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