Thursday, November 3, 2011

The Rise of Renters

Column Quick Summary:
  • Renting is on the rise.
  • In most circumstances, renting offers Echo Boomers - and potentially other Americans - a better housing situation.
  • Builders should be careful before assuming that this means that the United States needs more housing units.

I've write about Millennial Housing frequently and one trend we see among Echo Boomers is the preference to rent. A recent article discusses this rise of renting in the United States, after several decades of more efforts by Americans to increase their home-ownership efforts. The article points out:

The changing demographics also show a significant increase in immigrants, 20-34 year olds, and baby boomers entering the rental market.

Trends aside, for most Echo Boomers, renting is a superior option unless 4 criteria apply to you:

1. You plan to live in your area for a long time. 2. You work at a safe job that's immune from economic problems (for instance, the medical industry). 3. You want a specific home and you have no thought of selling it later. 4. You love buying and selling real estate, so when you take a loss, you can't imagine doing anything else.

For further details, see "Should I Rent Or Buy?"

One final note regarding the rise of renters: there will be a temptation among some to assume that more renters means more rental units, but I expect some Americans (especially Echo Boomers) to approach renting in creative ways. For instance, Jessica from 4 Heteroclite Ways To Save Money (The Millennial Way):

With many goals, an economy with prices rising, and an expensive location, what did Jessica do? She moved in with nine other girls in a five bedroom home.