New Survey Shows Strong Preferences for Rental Housing
Freddie Mac’s research shows residents of all age see renting as a more-affordable option than owning.
A new survey from Freddie Mac released this month disputes the narrative that rising rents are squeezing residents and forcing them to seek other housing options.
While sentiment varies by location, those who believe that renting is more affordable has increased to 76 percent from 68 percent since Freddie Mac’s most recent survey in March 2017.
Freddie Mac’s survey, conducted by Harris Poll, shows that the number of residents who view renting as good choice for them, increased from 52 percent in March to 57 percent in August.
More than half of the renters surveyed, 58 percent, said “renting fits my current lifestyle.” Of survey respondents, 63 percent of Young Millennials ages 21-27 and baby boomers ages 53-71 feel the statement reflects their views.
“What do 24-year old’s and 62-year old’s have in common?,” asks Paula Munger, NAA’s Director, Industry Research & Analysis. “They both strongly feel that renting fits in with their current lifestyles, according to Freddie Mac’s recently released renter profile survey. “Additionally, 68 percent of baby boomers [ages 53-71] feel that renting is a strategic choice that works at many different life stages.”
While respondents say housing, in general, is becoming more expensive, more than seven out of 10 residents view renting as more affordable than owning. Perceptions of renting as more affordable have increased across all generations. Since September 2016, the view that renting is more affordable has increased by more than 10 percentage points among Millennials (66 percent to 76 percent), Generation X (56 percent to 75 percent) and Baby Boomers (71 percent to 82 percent).
“This bodes well for the apartment industry as the 65-plus age cohort is expected to drive half of the demand for apartments through 2030, according to research by Hoyt Advisory Services, commissioned by NAA and NMHC,” Munger says. “Household size typically begins to decline rather precipitously as people reach their late 50s. That, coupled with homeownership rates falling off by age 75, means the supply of future apartment residents is substantial.”
The Freddie Mac survey showed that an increasing number of renters believe it will be more affordable to rent than to own in the future. The number who view renting as more affordable in the next 12 months increased to 25 percent from 20 percent in March 2017, while the number who believe buying a home would become more affordable decreased to 15 percent from 18 percent over the same period.
“Our rental survey confirms what we’re seeing in the market—that a growing number of individuals across demographic groups view renting as more affordable and better suited to their current economic situation,” said David Brickman, Executive Vice President and head of Freddie Mac Multifamily said in a press release. “These changing perceptions, combined with rising rents and tightening the supply of affordable housing, are likely to fuel continued multifamily market growth in the years ahead.”