Latest research reveals that many U.S. residents of homebuying age no longer consider purchasing a home an essential milestone along the path to achieving the proverbial American Dream.
In a survey of renters, 41% said their future aspirations do not involve homeownership, and, in fact, 20% say they expect to be lifelong renters.
All told, researchers for the 2024 New American Dream report from the multifamily industry operating system Entrata found a 33% increase in Americans who have no interest in homeownership compared to 2021.
But, why?
Some 23%, enjoy the location flexibility of renting, while 17% say financial flexibility of not being tied to a mortgage is renting’s greatest benefit.
“The American Dream is changing as more people are renting by choice,” the Entrata researchers noted, “and not because they can’t afford to own a home.”
Entrata’s CEO Adam Edmunds said the findings highlight an evolution in consumer psychology.
“Today’s apartment residents are reshaping the traditional American Dream to fit what’s most important to them, including flexibility, prime amenities offered in their communities and the ability to live life on their terms,” he said in a statement accompanying the March survey.
Edmunds calls the idea that renters are too young or financially unequipped to buy real estate an “outdated notion” and points out that “today’s renters are well-established and confident in their professional position.”
Data from the survey supports his point, showing one in three renters say they could afford a home that meets their needs in 2024, and a quarter of renters with a credit score above 750 never want to stop renting.
Research further backs the idea that renters with the right finances and credit for homeownership prioritize other purchases over property ownership.
Entrata found that 46% of renters prefer the financial freedom to pursue hobbies, and 74% report spending their discretionary money on experiences such as dining, travel, and entertainment.
What else are these financially secure renting adults investing in?
More than half, 56%, say they prioritize immediately paying off debts rather than saving, and 43% prefer to have their savings in investments and retirement strategies that are easy to liquidate instead of real estate.
Most of the renters who responded, 65%, say they are happy with the direction of their career, and 73% see a path to pursue their career goals. For 35%, renting increases their career opportunities, they say, because of the mobility it affords them.
A majority of renters, 63%, believe they have a similar or better quality of life than their homeowning parents at a similar age.
Also outmoded, the authors of the survey suggest, is the idea that rentals and apartments inherently lack the sense of community found in neighborhoods with single-family houses.
More than half of renters said they enjoy the fellowship of living in an apartment, with 40% having used communal spaces for social gatherings.
More than a third have friends or family over at least once a month.
“They not only like to entertain, but they’re good neighbors and enjoy being a part of an apartment community,” the authors note.
A respective 67% and 61% have helped neighbors in their apartment community or have had neighbors help them, the research revealed.
Find the full report at go.Entrada.com.
