When we think of rent, we often think of housing. Yet many Americans choose a lifestyle that puts rent first in many areas of their lives – clothes, cars, furniture.
According to a recent Harris Poll, one in four Americans prefers renting goods rather than buying them, with 58% of those respondents saying they do so for personal reasons rather than financial reasons or other constraints.
What Americans rent:
- Car — 17%
- Clothing/Accessories — 9%
- Electronics — 8%
- Furniture — 7%
The number rose to 47% when appraisers were asked whether they rent their homes.
“Over the past decade, we’ve seen the ‘rental economy’ grow in popularity as more opportunities to rent goods and services have flooded the market,” Courtney Alex, a consumer finance attorney at Credit Karma, said of the survey, according to Credit Karma.
“Renting can meet a variety of consumer needs, whether they are seeking flexibility, minimalism or savings. This is not to diminish the current affordable housing crisis that is making it difficult for many renters to own a home. Whatever the case, before fully committing to a rent-first lifestyle, consumers should consider all of their options to see how they meet their goals and aspirations,” she added.
Is renting a property the best option?
Buying rather than renting is usually the best option for long-term financial resilience. However, high mortgage rates have prevented many homeowners from selling their home and entering the market, and have deterred many new owners from buying.
According to Freddie Mac, the current interest rate on a 30-year fixed-rate mortgage is 6.49 percent as of August 15. Four years ago this week, the same rate was 2.99 percent.
Across the U.S., “buying a typical home costs nearly 37 percent more than renting on a monthly basis,” according to Bankrate. “Rent increases have moderated across the U.S. over the past year, and the combination of high home prices, elevated mortgage rates and low housing inventory presents a strong headwind for would-be homeowners.”
However, people would still prefer to buy rather than rent if affordability wasn’t an issue. According to the Harris Poll, 48 percent of Americans would buy if they had the money, while 28 percent said they wouldn’t buy because of high mortgage rates.
Why people choose to rent:
- Buying does not make financial sense – 13%
- Allows you to spend money on other things – 15%
- Buying is too much maintenance – 16%
- By renting you save money – 16%
- Do not want to live in the area long-term – 18%
- Renting is less stressful – 20%
