Not quite the American dream: Renting is becoming a better deal, even if you're wealthy or a retiree
High home prices and maintenance costs are making renting more appealing than buying for many.
Wealthy people are also choosing the flexibility and amenities that come with renting.
"Renting today isn't just for young adults starting out," said Nadia Evangelou, a senior economist for the National Association of Realtors. "It's actually a much more mixed picture. Over the past decade, we have seen more older millennials and Gen Xers staying in rentals longer, and even some boomers, for example, opting to rent later in life."
The overall number of renters has grown over the last several years. There were 45.6 million renter-occupied housing units in the US in 2023, up from 39.7 million in 2010, based on the Census Bureau's American Community Survey.
The US is also seeing an uptick in older tenants. An Urban Institute projection found that the share of people 65 and older who rent their homes will grow from 22% in 2020 to 27% in 2040 — an additional 5.5 million renting households. Older Black renters will see the biggest jump, doubling in number between 2020 and 2040.
A smaller share of US renter-occupied housing units were headed by people under 35 years old in 2023 than in 2010. Meanwhile, the share of rental households headed by someone 65 or older grew over that period.
Renters are staying in their homes longer as well, per a Redfin analysis of Census Bureau data.
"Renting is becoming less of a short-term stop and more of a long-term reality for many households," Evangelou said.
Renting could be a smart financial move
The main reason people are renting for longer: the surging cost of homeownership. Home prices have soared across the country amid a housing shortage. At the same time, property taxes, home insurance, and home repair and maintenance costs are on the rise.
All of that has made renting a better deal than buying in many places — a reversal of the historic norm. Indeed, homebuyers purchasing starter homes in 50 major cities in 2024 spent over $1,000 more on housing costs each month than tenants do.
To be sure, many renters are struggling, too. Tenants' incomes aren't keeping up with rising housing costs, and a rising share of renters are cost-burdened, meaning they spend more than 30% of their income on housing.
Some Americans are renting for longer by choice. Rich renters are on the rise. Many millionaire millennials and boomers with healthy savings, who could afford to buy a home, are opting instead to rent. They like the flexibility of a lease, the convenience of having a landlord handle home maintenance, and the amenities luxury rentals offer, like in-building doggy day care, dry cleaning, and yoga classes.
"I think of renting as paying for a service, and liken it to a hotel," start-up founder Tori Dunlap, a 30-year-old multimillionaire, told BI last year. "Renting is flexible, and I don't have to worry about things that homeowners worry about, like committing to a particular place or neighborhood or dealing with a burst pipe."
Some of these affluent renters opt instead to keep their money in the market or other more flexible, higher-return investments.
"People are reevaluating whether or not they want their homes to be their asset wealth-builder," Doug Ressler, an analyst at Yardi Matrix, part of the property-management software firm Yardi, said. He added that higher-income tenants "want to have the freedom and mobility of time, and they don't want to be saddled with the things that a house brings with it."
Some financial advisors are also challenging the conventional wisdom that buying a home is a smarter financial decision than renting.
"You've been lied to about buying property," Ramit Sethi, a popular financial advisor and star of the Netflix show "How to get rich," said in a 2023 video titled "Why I Don't Own a House as a Multi-Millionaire."
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Hill
18 minutes ago
- The Hill
US-EU trade deal wards off further escalation but will raise costs for companies, consumers
FRANKFURT, Germany (AP) — President Donald Trump and European Commission President Ursula von der Leyen have announced a sweeping trade deal that imposes 15% tariffs on most European goods, warding off Trump's threat of a 30% rate if no deal had been reached by Aug. 1. The tariffs, or import taxes, paid when Americans buy European products could raise prices for U.S. consumers and dent profits for European companies and their partners who bring goods into the country. Here are some things to know about the trade deal between the United States and the European Union: What's in the agreement? Trump and von der Leyen's announcement, made during Trump's visit to one of his golf courses in Scotland, leaves many details to be filled in. The headline figure is a 15% tariff rate on 'the vast majority' of European goods brought into the U.S., including cars, computer chips and pharmaceuticals. It's lower than the 20% Trump initially proposed, and lower than his threats of 50% and then 30%. Von der Leyen said the two sides agreed on zero tariffs on both sides for a range of 'strategic' goods: Aircraft and aircraft parts, certain chemicals, semiconductor equipment, certain agricultural products, and some natural resources and critical raw materials. Specifics were lacking. She said the two sides 'would keep working' to add more products to the list. Additionally, the EU side would purchase what Trump said was $750 billion (638 billion euros) worth of natural gas, oil and nuclear fuel to replace Russian energy supplies, and Europeans would invest an additional $600 billion (511 billion euros) in the U.S. What's not in the deal? Trump said the 50% U.S. tariff on imported steel would remain; von der Leyen said the two sides agreed to further negotiations to fight a global steel glut, reduce tariffs and establish import quotas — that is, set amounts that can be imported, often at a lower rate. Trump said pharmaceuticals were not included in the deal. Von der Leyen said the pharmaceuticals issue was 'on a separate sheet of paper' from Sunday's deal. Where the $600 billion for additional investment would come from was not specified. And von der Leyen said that when it came to farm products, the EU side made clear that 'there were tariffs that could not be lowered,' without specifying which products. What's the impact? The 15% rate removes Trump's threat of a 30% tariff. It's still much higher than the average tariff before Trump came into office of around 1%, and higher than Trump's minimum 10% baseline tariff. Higher tariffs, or import taxes, on European goods mean sellers in the U.S. would have to either increase prices for consumers — risking loss of market share — or swallow the added cost in terms of lower profits. The higher tariffs are expected to hurt export earnings for European firms and slow the economy. The 10% baseline applied while the deal was negotiated was already sufficiently high to make the European Union's executive commission cut its growth forecast for this year from 1.3% to 0.9%. Von der Leyen said the 15% rate was 'the best we could do' and credited the deal with maintaining access to the U.S. market and providing 'stability and predictability for companies on both sides.' What is some of the reaction to the deal? German Chancellor Friedrich Merz welcomed the deal which avoided 'an unnecessary escalation in transatlantic trade relations' and said that 'we were able to preserve our core interests,' while adding that 'I would have very much wished for further relief in transatlantic trade.' The Federation of German Industries was blunter. 'Even a 15% tariff rate will have immense negative effects on export-oriented German industry,' said Wolfgang Niedermark, a member of the federation's leadership. While the rate is lower than threatened, 'the big caveat to today's deal is that there is nothing on paper, yet,' said Carsten Brzeski, global chief of macro at ING bank. 'With this disclaimer in mind and at face value, today's agreement would clearly bring an end to the uncertainty of recent months. An escalation of the US-EU trade tensions would have been a severe risk for the global economy,' Brzeski said. 'This risk seems to have been avoided.' What about car companies? Asked if European carmakers could still sell cars at 15%, von der Leyen said the rate was much lower than the current 27.5%. That has been the rate under Trump's 25% tariff on cars from all countries, plus the preexisting U.S. car tariff of 2.5%. The impact is likely to be substantial on some companies, given that automaker Volkswagen said it suffered a 1.3 billion euro ($1.5 billion) hit to profit in the first half of the year from the higher tariffs. Mercedes-Benz dealers in the U.S. have said they are holding the line on 2025 model year prices 'until further notice.' The German automaker has a partial tariff shield because it makes 35% of the Mercedes-Benz vehicles sold in the U.S. in Tuscaloosa, Alabama, but the company said it expects prices to undergo 'significant increases' in coming years. What were the issues dividing the two sides? Before Trump returned to office, the U.S. and the EU maintained generally low tariff levels in what is the largest bilateral trading relationship in the world, with some 1.7 trillion euros ($2 trillion) in annual trade. Together the U.S. and the EU have 44% of the global economy. The U.S. rate averaged 1.47% for European goods, while the EU's averaged 1.35% for American products, according to the Bruegel think tank in Brussels. Trump has complained about the EU's 198 billion-euro trade surplus in goods, which shows Americans buy more from European businesses than the other way around, and has said the European market is not open enough for U.S.-made cars. However, American companies fill some of the trade gap by outselling the EU when it comes to services such as cloud computing, travel bookings, and legal and financial services. And some 30% of European imports are from American-owned companies, according to the European Central Bank.
New York Post
4 hours ago
- New York Post
Americans spend nearly half their day online — whether it's work or play — ‘eye-opening' poll shows
Wired Americans spend nearly half their day online — splitting that time almost evenly between watching videos or TV shows and working, browsing and shopping, according to a new survey. 'This new survey was eye-opening,' said Eric Bruno, senior vice president of product management for Optimum, whose telecommunications firm interviewed 2,000 US residents who have a home Internet subscription with any company for the poll. 'We were amazed to see how many hours folks are watching, shopping and browsing online on a daily basis,' Bruno told The Post. Americans are spending nearly half of their day on the internet, according to a new survey. Dusan Petkovic – 'It underscores how important a strong, affordable, and reliable Internet has become in today's world.' On average, screen-zombie Americans spend more than 10 hours daily accessing the Web. They spend 5.4 of those hours browsing, working, gaming, looking at social media, reading email or paying bills, the survey found. They spend another five hours streaming video or TV content. A majority of the people — 55% — use their television to stream shows or movies, followed by 20% with mobile phones and 25% combined using laptop or desktop computers or tablets. For general Internet consumption, a majority of customers access service from their mobile phones or computers, while 44% do so from their TV. Besides streaming videos and TV shows, nearly 80% of customers said they use the Web to browse or pay bills, 73% scour social media, 72% shop online, 37% handle work assignments and 20% complete school work. The online survey of 2,000 adults ages 18 and over who subscribe or use home Internet service was conducted between May 6-14.
New York Post
5 hours ago
- New York Post
Trump ‘really likes' TikTok— but admin warns Chinese ownership not acceptable as dead deadline looms
President Trump likes TikTok but the Chinese-owned short video app, used by some 170 million Americans, has to move to US ownership, Secretary of Commerce Howard Lutnick said on Sunday. 'The President really likes TikTok, and he said it over and over again, because, you know, it was a good way to communicate with young people,' Lutnick said in an interview on Fox News Sunday with Shannon Bream. 'But let's face it, you can't have the Chinese have an app on 100 million American phones, that is just not okay. So, it's got to move to American ownership, it's got to move to American technology, American algorithms,' he said. 'I know the President is positive towards TikTok, if it can move into American hands.' Advertisement 3 Commerce Secretary Howard Lutnick said Sunday that President Trump likes TikTok because 'it was a good way to communicate with young people.: FOX NEWS Lutnick's comments follow his warning last week that TikTok will have to stop operating in the U.S. if China does not approve a deal for the app. He told CNBC on Thursday that US must control the algorithm that makes the social media platform work. Advertisement TikTok parent ByteDance has a Sept. 17 deadline to divest the platform's US assets. Last month, President Trump extended by 90 days to Sept. 17, a deadline for China-based ByteDance to divest the US assets of TikTok. Trump's action took place despite a 2024 law that mandated a sale or shutdown by Jan. 19 of this year if there had not been significant progress. 3 President Trump has set a Sept. 17 deadline for Chinese firm ByteDance to divest TikTok's US assets. Getty Images 'China can have a little piece or ByteDance, the current owner, can keep a little piece. But basically, Americans will have control. Americans will own the technology, and Americans will control the algorithm,' Lutnick said. Advertisement 'If that deal gets approved, by the Chinese, then that deal will happen,' he added. 'If they don't approve it, then TikTok is going to go dark, and those decisions are coming very soon.' 3 A deal that was in the works this spring that would spin off TikTok's US operations into a new US-based firm stalled. Chidori_B – A deal had been in the works this spring that would spin off TikTok's US operations into a new US-based firm, majority-owned and operated by US investors. This stalled after China indicated it would not approve it following Trump's announcements of steep tariffs on Chinese goods. Trump has three times granted reprieves from federal enforcement of the law that mandated the sale or shutdown of TikTok that was supposed to take effect in January.
