As affordability continues to be a growing concern, more segments of the population, especially Baby Boomers and Gen Xers, are showing less interest in buying a home, according to Freddie Mac Multifamily’s Profile of Today’s Renter report.
About 67% of all renters say renting is more affordable that owning a home, the report showed. And about 73% of Baby Boomer renters said renting is more affordable. And 67% of renters also said they will continue renting for financial reasons, up from 59% two years ago.
That number is significantly higher when it comes to Millennials. About 74% of Millennials say they will continue renting for financial reasons, up a full 15 percentage points from 59% in 2016.
What’s more, about 50% of Baby Boomers who are currently renting do not think they will ever buy a home in the future. This is up eight percentage points from the survey taken just six months ago.
Of those who say they will not own a home in the future, 35% say they have no interest in owning and 15% believe they will never be able to afford it. Another 31% of Gen Xer renters say they will never own a home, up from 28% six months ago. Among Gen Xers, 19% lack interest and 12% don’t think they will ever be able to afford it.
“Perceptions of affordability and cost continue to play an outsized role in the choices of America’s renters, as they overwhelmingly see renting as more affordable and the right choice for them – right now,” said David Brickman, executive vice president and head of Freddie Mac Multifamily.
“Remarkably, half of Baby Boomers who rent do not anticipate owning a home in the future, with a growing number of Generation Xers following suit,” Brickman said. “Indeed, we are witnessing an historic shift in preference among older Americans, as they increasingly are choosing the size, convenience and affordability that renting offers over ownership.”
While they may be struggling with the idea of homeownership, a growing number of renters believe their economic situation has improved compared to last summer.
But more and more renters continue to express they are satisfied with their rental experience at 66%, up from 60% in August 2017. Even among renters who experienced a rent increase in the past two years, 64% said they do not plan to move, up from 49% in August. And a full 70% of Baby Boomers who experienced rent increases say they do not plan on moving.
About 54% of renters continue to believe renting is a good choice for them now, including 71% of Millennials. And about 31% of urban renters do not see homeownership in their future, up from 27% in August.
Freddie Mac’s renter research is based on a survey conducted online from January 30 to February 1 among 4,115 adults aged 18 and over, including 1,209 renters, by Harris Poll, on behalf of Freddie Mac.