Why is America Becoming a Nation of Renters?

Written on April 13, 2015 by , updated on March 21, 2016

Nation of RentersOur friends at the PM Guardian did some excellent research on why America is becoming a nation of renters.

The most notable facts are:

  • 5 million renters enter the market from 2005 to 2012
  • 43 million renters in the US (2013)

The top 5 cities with the most renters are:

  1. New York City, NY (68%)
  2. Miami, FL (68%)
  3. Boston, MA (67%)
  4. Providence, RI (66%)
  5. San Francisco, CA (64%)

As a landlord, I couldn’t be happier, because my customer base is increasing. But as a citizen, living in an economy primarily founded on home ownership, it concerns me that fewer people are using property to build equity and save for retirement.

Are we becoming a nation of renters by choice, or are the few property investors buying more properties, thereby helping the rich get richer?

The infographic below shows a detailed timeline of the catalytic events that have triggered this shift from homeownership to renting.

I’d love to hear your thoughts and theories on this – please let me know in the comments section.

Related Reading:

Source: PM Guardian

renters-infographic

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8 CommentsLeave a Comment

  • Laura Agadoni

    I think a main culprit is student loan debt. Historically, first-time homebuyers have been recent college grads. With hefty student loan debt, they can’t qualify for a home loan.

    • Adam Busch

      Lauren, agreed. Also, from the perspective of a young millenial in the beginning of their career, I think that planning for home-buying is associated with finding a stable and long term career that can be sustained in geographic. However, the steps to finding that career are varied and take years to accomplish. Add in that since the current job market has the ability to draw applicants from a national pool, moving to new cities is just another aspect of career building and further sustains the idea of temporary living spaces aka rentals. Basically, it takes longer to find a career and longer to get to the point where settling down in one area seems realistic.

  • Charles J. Lillicrapp, Jr. AB,BA

    Renting/leasing a single family dwelling requires significantly less upfront cash. Is a quicker and more understandable transaction. Does not require a long term commitment. Provides real life experience with the expenses of what it will be like to own, maintain and operate a “home”.

    • Lucas Hall

      Hi Charles,

      That’s what scares me. In a culture of instant-fixes and “I want it now” mentality, I’m concerned we will continue to build a nation built on credit rather than equity. But maybe it’s too late for that :(

  • EMD

    When the government steps in to ‘fix’ a perceived social or financial problem, things only get worse–every time. The only answer is paring back of these ‘helping’ programs and entitlements, which will be painful for awhile, but will lead to much greater stability and prosperity overall. Freddie, Fanny, Obamacare, food stamps, government bailouts of banks, homeowners, and students—the list never ends. We’ve become a nation of unmotivated (lazy?) people because we don’t have to work anymore or pay our own way. So sad.

  • Realitycheckgirl

    Ive owned 6 homes in multiple states and multiple cities and each time ive sold ended up with 20-50k in equity of which weve walked away with 10-30k after closing costs and realtor fees. Now that remaining amount didnt even cover the years of maintenance and repair costs to our homes. Now when we calculated the total amount of we would have paid if we had rented all those years it came out to either the same or less of what we paid in homeownership.
    And thats not even counting the astronomical amount of free time we
    Wasted doing of our own repairs and maintenance so that we can at least keep some of our cost down and not have to hire contractors all the time. The rising cost of contract work is enough to scare some out of home ownership.

  • Realitycheckgirl

    Ive also been a landlord and after about 6 years of that we ended up selling the property as it was costing to much to maintain especially with tenants that destroy the property or dont pay their rent. In 6 years we had 3 evictions with at least a year of owed rent among those 3 tenants and had to pour thousands of dollars in repairs. Yep we were done with our landlord experiment. Never again.

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