Washington, D.C.—A majority of consumers, 76 percent, deem renting to be more favorable than owning a home in the current real estate market, according to an online survey commissioned by the National Apartment Association (NAA) in May. This represents a 5 percent increase from 2008.
The survey was conducted by market research firm Harris Interactive on behalf of the National Apartment Association. Respondents included 2,140 adults, including 1,443 owners and 617 renters. It is the third such survey that the NAA has completed, Douglas Culkin, president of NAA, tells MHN.
“I’m not sure that owning a home at any cost is a dream that is going to be pursued any longer, because the fallout from the subprime collapse has shown a lot of people that’s not the way to go—the real estate market is not ever-increasing in value,” Culkin asserts.
The survey also found that both renters and homeowners are not eager to make any changes in their housing status within the next year; 60 percent of renters plan to continue renting their current or new residences within the next year, while 71 percent of homeowners plan to stay in their current home over the next year.
“We’re seeing in this economy [that] renting provides consumers with more options for mobility. I think that everyone is looking at the flexibility of renting at this point in time, which goes back to labor mobility. And again, we’re seeing that confidence in the housing market remains low, and there is a lot of uncertainty about what’s going on” in the market, says Culkin.
“People aren’t looking forward to making a change. Whether you own or rent, most people are saying that they want to stay, and I think that’s a factor of uncertainty of what’s happening in the economy,” Culkin adds. “Most people feel that we have really turned the corner,” but as long as these “market blips” continue, “people will just continue to bide their time and stay with what they’re comfortable with,” he predicts.
Furthermore, the Gen Y students graduating from college and looking for a place to live are likely to rent since banks will be reverting back to traditional financing of 20 to 25 percent down, making home ownership much more difficult for younger generations, according to Culkin.
“Millenials want to be close to where they work and play and be close to mass transit,” says Culkin. “I think that’s another instance where communities, whether they are first-class or not, that [are] close to the centers where people are working, playing, where there is rapid transit, will be good opportunities for owners in the future.”
The survey also found an increase from 2008 in the number of adults noting the additional burden of major home repairs or maintenance as a primary benefit of renting a home—64 percent in 2010, compared to 57 percent in 2008.
Other reasons cited for preferring renting over ownership include financial reasons (50 percent), such as not being impacted by an unpredictable real estate market (33 percent) and not being susceptible to foreclosure (also 33 percent).