There’s an assumption that renters in America are only renting until they can afford to buy a home. For some, this is correct. According to Apartment List's 2021 Millennial Homeownership Report, 42% of millennials did buy a home in 2020. But this isn’t the case for the remaining 58%, with 34% of millennial respondents saying that they prefer the “flexibility” of renting.
What do they mean by “flexibility” though?
It’s true that many millennials don’t buy homes because of personal debt, or the inability to afford one. (According to the same Apartment list survey, 74% of millennials said that they cannot afford to buy a home. Renting itself is also pricey.) However, some millennials simply don’t like being tied down or won’t buy into what The Atlantic calls an “ownership society.” Could renting be the new counter-culture, or are cultural priorities shifting for millennial renters?
42% of millennials switch jobs every one to three years, and most millennials move every one to two years.
Only 44% of millennials got married in 2019, compared with 53% of Gen Xers and 61% of Boomers at the same age, making average household income lower.
According to the Experian 2020 State of Credit report, the average millennial consumer has about $27,251 in non-mortgage debt, including credit cards, student loans, car loans and/or personal loans.
37% of high-income millennials are planning to spend more than $5,000 on an upcoming luxury trip.
So 34% of millennial renters prefer to rent. Why? Because they prioritize being able to come and go as they please, especially if they need to relocate for a job. They also might have a good amount of debt, or plan to delay starting a family. It’s clear that while settling down and homeownership was more of a priority for boomers and Gen X, millennial renters don’t find the same value in putting down roots and instead value the freedom of mobility and exploration.
I’m curious to see how this will change the importance we place on homeownership and family planning as the ultimate “American dream.” I, like many of my colleagues at Rhino, believe that renting could become more desirable than owning a home for everyone. We just have to make it easier and more affordable. Especially, since it’s clear that Gen Z may continue the renting trends we see in millennials. For example, compared to boomers, twice as many Gen Zers have a luxury bucket list trip planned and hope to take it soon.
America is likely to be a full nation of renters, who find home wherever they are, rather than in just one place.