This year, navigating the landscape of American housing has proved to be rocky for both renters and homeowners.
As 2018 comes to an end, Zumper, a rental listing site, has revealed that for many Americans, the dream of homeownership is fading.
Zumper partnered with PadMapper to launch its Annual Rental Survey, designed to gauge how Americans feel about renting.
The report uses survey data from 5,399 adult respondents nationwide, gauging their perceptions on 40 key questions, ranging from factors that impact their pursuit of homeownership.
In 2018, Zumper discovered that 33% of respondents said that they no longer believed the American dream involved homeownership. This is a bit higher than last year’s percentage of 32%, but still up four percentage points from 2016.
The report shows that for most U.S. homeowners and renters the decision between renting and owning depends on three key measurement areas: financial situation, mortgage rates and family size.
Affordability has been a major concern for Americans throughout the year, as mortgage rates and rents both reached record highs.
In July, a report from RentCafé and Yardi Matrix showed rents hit an all-time high in June, crossing the $1,400 threshold for the first time ever.
“Generational and demographic changes, shifting employment opportunities, policy and economic influences are impacting the housing market and turning homebuyers into renters nationally,” Yardi Matrix Director of Business Intelligence Doug Ressler said. “Student loan debt, smaller household sizes, larger down payments requirements, rising interest rates, are also contributing to this change.”
Notably, the Zumper survey showed Americans also cited the ease of moving, home repair, taxes and ability to paint or remodel as important factors in their housing decisions.
NerdWallet’s Home Improvement Report revealed that from 2015 through 2017, Americans spent $449.5 billion on home improvement projects, but more than 30% of Americans did not set aside funds for these renovations.
Zumper's survey also discovered that age has a significant impact on the likelihood of a renter pursuing homeownership. According to the survey, as a renter gets older, the less likely they are to believe the American dream involves homeownership.
The company highlights that 32% of those aged between 45 and 64 no longer believe homeownership is key to the American dream, whereas only 29% of those aged between 18 and 24 have lost faith.
This is good news for the housing market as, a recent report conducted on the behalf of Ernst & Young discovered homeownership for older millennials quickly becoming popular.
“Homeownership for Millennials between the ages of 28 and 31 increased from 27% to 47% in two years (ownership of those aged 32-36 increased from 46% to 57%),” reports the survey. However, some things have not changed. The Millennials report student loan debt continues to delay homeownership and, are “deeply distrustful of traditional American institutions, preferring to rely on themselves and a good education.”
Zumper’s survey points out that 38% of respondents still grapple with their loans, which could explain why 62% of respondent currently lives with a roommate.
Overall, although many factors deter Americans from entering the housing market, affordability continues to be the biggest factor keeping Americans in the renting game.
You can read more about Zumper’s report here.
