More Boomers, Gen Xers Prefer Renting

Growing segments of the population–especially Baby Boomers and Generation Xers–are showing less interest in buying a home, said Freddie Mac Multifamily, McLean, Va.

The firm’s Profile of Today’s Renter report revealed growing economic confidence among renters, but said affordability remains the dominant factor driving renter behavior.

“Perceptions of affordability and cost continue to play an outsized role in the choices of America’s renters, as they overwhelmingly see renting as more affordable and the right choice for them–right now,” said Freddie Mac Multifamily Executive Vice President David Brickman.

Brickman said half the Baby Boomers who rent said they do not anticipate buying a home in the future and more Generation Xers are following suit. “Indeed, we are witnessing a historic shift in preference among older Americans, as they increasingly are choosing the size, convenience and affordability that renting offers over ownership,” he said.

The report said 67 percent of renters view renting as more affordable than owning a home, including 73 percent of Baby Boomers between 53 and 71. Similarly, two-thirds of renters who say they will continue renting cited financial reasons, up from 59 percent just two years ago.

Freddie Mac Multifamily found that half of Baby Boomers who currently rent do not anticipate buying a home in the future, up eight points from six months ago. More than one-third said they have no interest in owning and 15 percent said they do not think they will ever be able to afford to buy.

Similarly, 31 percent of Gen Xers between 38 and 52 expressed that sentiment, up from 28 percent six months ago. Nearly 20 percent of those Gen X respondents said they lack interest in buying; 12 percent said they believe they will never be able to buy.

Though the survey found a growing number of renters believe their economic situation has improved compared to six months ago, it also found cost is increasingly driving rental decisions. Just over two-thirds of renters said they continue renting for financial reasons, but that figure rose to 74 percent for Millennials aged 21-37. Those who rent in a multifamily property as opposed to renting a single-family home and renters in urban areas also said they are increasingly likely to continue renting for financial reasons, the report said. 

“Renter satisfaction remains high, but the continued shortage of supply and growing demand means more renters are looking at cost than ever before,” Brickman said.