Cheaper to Buy, Low Mortgage Rates: Why Are People Still Renting?

Cheaper to Buy, Low Mortgage Rates: Why Are People Still Renting?

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Though we may talk about eventually owning your own home a lot, it’s important to acknowledge particular trends among certain demographics in terms of renting vs. owning. Even though mortgage rates are at all time lows and buying is about 44% cheaper than renting, many people are opting to renew their leases and stay in apartments. Is the American Dream of owning a home beginning to shift with nearly half of Americans in metro areas remaining renters?

There are several reasons why certain people enjoy renting more than trying to pay down a mortgage, but even more interesting is the types of people who choose renting over ownership. Millennials make up a large majority of this demographic, as many have student loans to repay and don’t wish to take on more debt. Outside the youthful group are single older folks who have a more eclectic lifestyle and like the flexibility. So what is it about renting that is so alluring despite rental prices creeping up all the time?

Here are a few reasons someone may prefer an apartment over a house:

Extra financial responsibilities

Besides the mortgage, you as the homeowner are solely responsible for a number of other costs, including things like:

  1. Maintenance – piping, broken appliances, leaky roofing…you name it, you have to fix it
  2. Homeowners insurance
  3. Homeowner’s Association fees
  4. Property taxes
  5. Renovations for better living and property value

Landlords take care of everything else when it is needed; not everyone likes having to mow a lawn or worry about curbside allure. This expenditure calculator from the New York Times can help you determine if renting or buying is the way to go for you.

Freedom to pick up and go

Whether you want to go on a trip or just feel like relocating to somewhere new, you are able to do so once your lease is up. With a home and a mortgage, trying to sell the home is much more of a hassle. Also, unexpected things like a job change or family emergency can yield an easier transition should you need to move elsewhere.

Added security

Most rental properties require a security code to get into the complex and are bordered by walls and metal gates to keep outsiders away from tenants. If you are one to worry about protecting yourself, others, and your stuff, fancier apartment complexes have security personnel that patrol around for added peace of mind.

A sense of community

While it’s entirely possible to have a sense of community in a suburban neighborhood, being more enclosed with your fellow tenants and passing the same people in the hall constantly lends itself to become more friendly and involved with those around you. Meeting at the onsite club house, swimming at the community pool, and even walking around the main courtyard can inspire you to get to know your neighbors better than you would otherwise.

Closer to city activities and better for walkable urbanism

While suburbia can access the fun activities in the city, they typically have to travel a longer way than those who dwell in apartment complexes who are able to just walk down the street to the same activity. Apartments typically have the travel convenience to amenities around town while homeowners usually must leave early to beat the traffic and find parking. Also, as walkable urbanism city planning becomes more prominent, apartments fit nicely into the layout and housing complexes will become increasingly popular.

Benefits of Owning

This may all sound good, but there are downsides to renting too. There are many benefits to owning your own home as well that renting simply doesn’t afford you:

  1. You own it – Think of your monthly mortgage as savings you can use later. Even though you are paying off a mortgage, one day the payments will stop; renting means you will be paying for the rest of your life. And the worst part? Money you pay for rent is money gone.
  2. You can get evicted – While repossession can happen for delinquent payments, a landlord could evict you for other (much more insignificant) reasons than simply not paying the rent on time.
  3. Better for a family – If you’re looking to settle down and have a family, a house affords you much more space.
  4. You have more privileges – Want a pet? Want to make a renovation or replace something? You’d have to go through a lot of red tape or be at the mercy of the landlord’s rules in a property you don’t own. In your own house, you’re the boss.
  5. Your own parking – If you’ve ever rented an apartment in the city, you know that parking is a premium and sometimes you end up parking a block (or five) away from your place. The only exception is if you have your own parking space, but this can be costly every month and more difficult if you have more than one car. Most homes have a garage and a driveway so parking is not a concern.

Despite being more expensive in the long run, many stay in their apartments mostly out of convenience. payments month to month seem smaller (even if they are not), plus all maintenance, utilities, and amenities are taken care of. As for singles who stay past their younger years, they tend to choose nice complexes that afford them a lot of amenities and luxury in more exclusive setting. What are your thoughts on renting vs. owning a home? Share what you think on our Facebook page!

 

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Jonathan is a CSULB graduate with expertise in wielding the art of the written word. He has been writing professionally for many years in copywriting, content editing, branding, and journalism. Everyone has a story to tell, and Jonathan is able to bring it to life.