A few weeks ago the WSJ reported that “U.S. homeownership rate fell for a second straight quarter, as high prices and limited starter-home inventory are steering more households toward renting.” This coupled with the fact that home prices rose over the last 2 decades while wages have remained stagnant (see chart below) confirms that we are living in a rental economy.
Although the economics of wages, home prices, and supply drive many hopeful homeowners into renting, others prefer renting for mobile flexibility, lack of debt, and access to amenities and advantages that they may not otherwise have in a single family home.
In Freddie Mac’s recent survey of renters and homeowners, 82% of renters stated that renting is more affordable for them (see chart below). This percentage has steadily increased from 69% in January 2016, further affirming the idea that the rental economy is here to stay.