When we think of renting, we usually think of housing, but many Americans choose a rent-first lifestyle for many aspects of their lives, including their clothes, cars, and furniture.
According to a recent Intuit Credit Karma survey, one in four Americans prefer to rent rather than buy items, and of those, 58% say they rent out of personal preference rather than financial or other pressures.
What Americans Owe:
Automobiles — 17% Clothing and accessories — 9% Electronics — 8% Furniture — 7%
When researchers asked whether they rented their home, that number jumped to 47 percent.
“Over the past decade, the rental economy has grown in popularity as opportunities to rent goods and services have flooded the market,” Courtney Areb, consumer finance advocate at Credit Karma, told Credit Karma about the study.
“Renting can meet a variety of consumer needs, including flexibility, minimalism and savings. This is not to discount the current high housing prices that are preventing many renters from achieving homeownership. Either way, before fully embracing a rental-focused lifestyle, consumers should evaluate all of their options and determine how it aligns with their goals and aspirations,” she added.
Is renting a property the best option?
In the long term, buying is usually the best option rather than renting, but high mortgage rates are preventing many current homeowners from selling their homes and getting into the market, and they are also deterring many new owners from buying.
As of Aug. 15, the 30-year fixed-rate mortgage was 6.49%, according to Freddie Mac. Four years ago this week, the same rate was 2.99%.
According to Bankrate, across the U.S., “the typical home costs about 37% more to buy than it does to rent, month-to-month. Rent increases have been modest across the U.S. over the past year, but soaring home prices, rising mortgage rates and low housing inventory combine to create significant headwinds for would-be homebuyers.”
That said, if housing prices weren't an issue, people would choose to buy rather than rent. According to a Harris Poll survey, 48% of Americans said they would buy if they had the money, but 28% said they wouldn't buy because of high mortgage rates.
Reasons why people choose to rent:
Buying doesn't make financial sense — 13% Frees up money for other things — 15% Buying is hard to maintain — 16% Renting saves money — 16% Don't want to live in the area long term — 18% Renting is less stressful — 20%
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