Millennials: Are they renting or buying?

The millennial generation, born between 1981 and 1996, has been the subject of much speculation and analysis when it comes to their housing preferences. In the midst of a challenging housing market and fluctuating mortgage rates, millennials are making decisions that could reshape the real estate landscape. This blog post dives into both past and present trends of millennial housing choices, exploring whether they prefer renting or buying.

The Rise of Renting

Recent survey data from Apartment List paints a vivid picture of the shifting attitudes of millennials toward homeownership. In 2022, a significant 24.7% of millennials indicated that they plan to "always rent" rather than pursue the path of homeownership. This percentage marks a substantial increase from 2018, where only 13.3% expressed similar views. Here are the main reasons why millennials have increasingly preferred renting over buying in the last couple of years. 

The Financial Factor:

Unsurprisingly, financial considerations are at the forefront of millennials' minds. A staggering 74% of respondents stated that their inability to afford a home is a key factor driving their decision to rent. The combination of high home prices and soaring mortgage rates has created a challenging environment for aspiring homeowners.

Flexibility and Freedom:

A desire for flexibility emerged as another driving force behind millennials' preference for renting. Approximately 42% of respondents cited the allure of flexibility as a reason to remain renters. This makes sense with this generation's tendency to embrace change, pursue career opportunities, and explore new locations. 

Maintenance and Costs:

The practical aspects of homeownership also weigh heavily on millennials' minds. Around 36% of survey participants highlighted their preference to avoid the burdens of home maintenance and other associated costs. Renting offers a level of convenience and freedom from the responsibilities that come with property ownership. 

Risk and Uncertainty:

For some millennials, the financial risks associated with homeownership act as a deterrent and view renting as the safer option. Nearly 29% of respondents expressed concerns about the potential financial risks tied to buying a home, particularly given the unpredictability of the real estate market and broader economic factors. 

Something to think about 

It's important to note that the millennial generation experienced a significant milestone recently. The number of millennial homeowners has now surpassed that of millennial renters, indicating that more than half of the generation owns a home. However, this transition occurred at a slightly later age compared to previous generations. The average age at which millennials became an owner-majority generation was 34, highlighting the unique challenges they've faced on their path to homeownership.

While the desire for homeownership remains strong, the challenges of the housing market have led a significant portion of this generation to opt for renting. Flexibility, financial constraint, and maintenance and renovations put millennials on the increase of wanting to rent in the day in age. And as millennials continue to shape the housing market, it's evident that their journey toward homeownership is influenced by a delicate interplay of economic factors and personal priorities.

Haley Samuels

Haley is a Consumer Marketing Manager at Rhino.