More and more believe renting is cheaper than homeownership – report

As home prices continue to rise, more and more renters are coming to believe they should keep on renting

More and more believe renting is cheaper than homeownership – report
More and more renters believe that continuing to rent is cheaper than buying a home, according to new data from Freddie Mac.

The last few years have seen a spike in apartment construction, causing rent increases to begin to moderate in many US cities, according to a Wall Street Journal report. Meanwhile, home-price increases have accelerated. The upshot, the Journal reported, is that a Freddie Mac survey found that about 76% of renters said in August that they believe renting is more affordable than owning. That’s up from 65% in September of 2016.

“We talk virtually every day about how renting is becoming less and less affordable,” David Brickman, executive vice president of Freddie Mac Multifamily, told the Journal. “I think the answer is just that housing is becoming less and less affordable and renting is the more affordable of the two.”

Freddie Mac found that the view that renting is more affordable saw a significant increase across all age groups. Seventy-six percent of millennials thought renting was more affordable, a spike of more than 10 percentage points from a year ago. About 82% of baby boomers – an 11-percentage-point jump – saw renting as more affordable, and the share of Gen-Xers who hold that view spiked from 56% in 2016 to 75% now.

Part of the issue, according to the Journal, is a persistent shortage of single-family home inventory. The depressed inventory is one of the factors depressing the overall appetite for home ownership. Skyrocketing prices aren’t helping either; national home prices increased by 5.9% over the 12 months ending in July, the Journal reported.

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