While some apartment renters may be saving up for an eventual down payment on their first home, many more are fully committed to the renter’s life. This November, a new survey from Freddie Mac shed new light on the phenomenon.
Freddie Mac is an organization that helps fund loans to American homeowners and apartment developers, and the report found that saving money to buy a home is slipping further down the list of renters’ priorities.
Despite the deep connection between home ownership and the American dream — or at least the classic version of it — more Americans are choosing to rent today. Americans’ reasons for renting are as diverse as the country’s population. Some renters can’t yet afford to purchase a home, while many Millennials and seniors have no interest in securing a mortgage at all.
The Freddie Mac poll found that saving for a down payment on a home ranked fourth on renters’ list of financial priorities. When asked what they were saving for, 59% of renters listed saving for emergencies; 51% said retirement; 50% said their children’s education; but just 39% listed a down payment.
“Renting provides a lot of conveniences and perks that traditional home owning does not,” says Aurelia Vanderkolk, Marketing and Social Media Coordinator, Becovic Management. “Flexible lease terms, community amenities and on-site maintenance are just a few of the many reasons people of all ages choose to rent. Buying a home is a serious and expensive undertaking so living in an apartment provides an excellent and preferred alternative for many.”
The Freddie Mac report also found a sharp divide between two segments of renters. Households that were renting a single-family home were far more likely to say they were saving for a home. But families renting homes in multi-family apartment communities or buildings overwhelmingly said they planned to continue renting.
Fully 79% of multi-family renters intended to continue living in apartment communities.
“Growth in the renter segment will most likely occur through multifamily properties as more than half of those currently renting single-family properties are planning to become homeowners in the near future,” said David Brickman, executive vice president of Freddie Mac’s Multi-family division. “The data shows single-family renters are increasingly more dissatisfied than multifamily renters.”
The U.S. isn’t the only place where renting is on the rise. And as demographics change, some places are looking to beef up protections for tenants. This December, the City of Vancouver considered a new law that would give renters new rights, including compensation for moving costs in certain cases.
If trends continue in the U.S., more cities could look to add similar tenant protections.