The past couple of years have changed us. Americans have reprioritized their lives, and the traditional lifestyle no longer fits.
We don’t want to be rooted in one place. Companies have evolved, and many people have a work from anywhere option. If you bought a condo in the city and had kids, that might not be the lifestyle you want. You need to deal with the selling, mortgage approvals, and finding a new home in the right school district. Whereas you can pick up and move anytime with the rental lifestyle.
Do you want to try living on a farm in rural Wisconsin? Go for it. Do you want to move to the top school district in your state? You do you. You want to move to a premium home with all the amenities. You can! Renting provides the flexibility to evolve.
Freedom isn’t the only reason Americans are moving away from homeownership. This article will explore the top five reasons the American Dream has changed.
Why is there a trend toward renting over buying?
More and more people are choosing to rent rather than purchase a home. There are many reasons for this trend, but we will talk about the top five.
Buying is Hard
In the micro-economic environment that we’re in, buying is more complex than ever before. Prices are soaring, and loan approvals are more difficult. The Great Recession taught the mortgage lending industry that you can’t approve everybody without consequences. The popularity of subprime mortgages between 2007-2010 allowed buyers to get approval for higher sums than they could truly afford, causing foreclosures to skyrocket. Since then, the mortgage industry has tightened up, and it has become more challenging to get approved for a loan.
Pandemic Perspective
Since the COVID-19 pandemic began, perspectives have changed. People want freedom and space. Many employees can work from anywhere and are no longer tied to the location of their company. So, why be tied down at all? Renting offers the flexibility to try new cities, move out to the country, or live a nomadic lifestyle.
Renting Up
You can enjoy a better lifestyle by renting because it allows you to live in a home you couldn’t afford to buy. Based on your mortgage approval limitations, you might not be able to afford a home in a great school district, with lots of acreages or expansive square footage, but you can have all of those things by choosing to rent.
Salaries are increasing
Employees are seeing higher wages, which means they no longer need roommates. So, what used to be four people in a four-bedroom house is now four separate rental houses.
Premium rentals
More and more real estate companies are investing in single-family rentals (SFR) and taking rentals up a notch. They’re no longer just a house to live in, but a home with amenities. These more prominent SFR investors have the means to bring in technology to streamline processes like tenant leasing, onboarding, rent collection, and service. Owner-operators, property managers, and start-ups make renting an affordable and convenient lifestyle choice.
This trend is likely to continue for some time. Housing inventory is low, and loan approvals are complex without any sign that this will change. The low vacancy rates prove this is a lifestyle that people want.
Kori Covrigaru, CEO of PlanOmatic, said, “I don’t see this going away anytime soon. People don’t want to be tied down. We’re beginning to see an evolution of what the American Dream means to people. We boxed people into the American Dream, saying homeownership is the only choice, and that’s not the case anymore. It’s evolving. People don’t want to plop themselves down in one place for their whole lives anymore. They want flexibility.”