Research Says More Tenants Are Renters For Financial Reasons

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Research Says More Tenants Are Renters For Financial Reasons

New research shows that more tenants are renters for financial reasons and that a growing number are satisfied with the rental experience, according to Freddie Mac.

However, renters in the West say they are feeling impact of rent increases more than other areas.

Among millennials 71 percent say renting is a good choice for them.

The spring "Profile of Today's Renter" by Freddie Mac finds a total of 67 percent of renters view renting as more affordable than owning a home, including 73 percent of Baby Boomers (aged 53-71).

Similarly, 67 percent of renters who will continue renting say they will do so for financial reasons—up from 59 percent just two years ago.

Numbers higher for millennials and multifamily

While 67 per say renting is more affordable there are three points to keep in mind according to the research from Harris and GFK research:

  • That number is significantly higher for millennials (aged 21-37), jumping 15 points from 59 percent in 2016 to 74 percent. 
  • Multifamily renters (versus single-family renters) expressing this view jumped eleven points - from 57 percent in 2016 to 68 percent today.
  • And although this increase takes place in all geographic areas, urban renters are increasingly likely to continue renting for financial reasons.

Overall the study shows a significant majority, 64 percent, of renters cite price as the most important factor when considering their next home, a theme consistent across all generational cohorts.

New research shows that more tenants are renters for financial reasons and that a growing number are satisfied with the rental experience

Renters In The West Face Price Increase Issues

The study also shows renters living in the western United States with increasing issues related to affordability and the cost of living.

Those living in the West feel the impact of rent increases more than other regions, with 64 percent saying they are now spending less on other essentials due to changes in their rent—which is at least nine points more than any other region.

Additionally, renters living in the West perceive homeownership as more difficult to attain than other regions, with 51 percent believing homeownership is less accessible than three years ago.

Rent satisfaction continues high

Renters happy with renting

Rental satisfaction continues to run high.

A significant and growing majority of renters – 66 percent – are satisfied with the overall rental experience, up from 60 percent in August of 2017.

Even among renters who have experienced a rent increase in the past two years, a growing number – 64 percent – stated they do not plan to move, up from 49 percent in August 2017. This includes a noteworthy 70 percent of Baby Boomers.

In addition, a majority of renters – 54 percent – continue to believe that renting is a good choice for them now, including 71 percent of millennials.

Read the full report here.

Resources:

New Research Finds Increasing Preference for Renting

Profile of Today’s Renter – Multifamily Research Center

Harris Profile of Today’s Renter

About the report:

Opinions, estimates, forecasts and other views contained in this document are those of Freddie Mac's Economic & Housing Research group, do not necessarily represent the views of Freddie Mac or its management, should not be construed as indicating Freddie Mac's business prospects or expected results, and are subject to change without notice. Although the Economic & Housing Research group attempts to provide reliable, useful information, it does not guarantee that the information is accurate, current or suitable for any particular purpose. The information is therefore provided on an “as is” basis, with no warranties of any kind whatsoever. Information from this document may be used with proper attribution.

 

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