The latest Consumer Price Index (CPI) shows shelter – in particular, rent – remains one of the most stubborn contributors to inflation. In August, the cost of rent rose 0.4% from July to August and was up 5% in the last 12 months.
Despite that, more Americans are renting their homes – not because they have to but because it’s their preference. In a survey of renters by Lance Surety Bonds, one in eight renters said they plan to rent their homes indefinitely.
“This view is most commonly held by baby boomers, 37% of whom prefer to rent even though they are the most likely generation to report feeling financially secure, Lance Surety Bonds’ Ricardo Rodriguez told ConsumerAffairs. “This also suggests that, as baby boomers age, fewer are feeling up to the task of maintaining a home. In fact, nearly 60% of baby boomers said they rent because they do not feel capable of owning a home.”
The survey also showed that 53% of renters do so because they can’t afford a down payment, which has gotten to be very large as home prices have risen. But Rodriguez says renting often offers a better alternative to purchasing a home, especially if it is one you can barely afford.
“It provides a more flexible living arrangement for those who do not wish to be locked into a mortgage, and it’s a great option for people who would prefer to not have the responsibility of maintaining a home,” he said. “These renting perks are no doubt contributing factors for the one in eight renters who say they will continue to rent indefinitely.”
Even millionaires rent
But even people who can afford a home – even an expensive one – sometimes prefer to rent. The Wall Street Journal reports a growing number of millionaires prefer to rent a luxury home rather than purchase one.
The Journal cites the Federal Reserve’s Survey of Consumer Finances, which shows that for households whose net worth ranked in the top 5%, the share of renters rose to 3.7% in 2022.
The main reason? At least one tech entrepreneur told the Journal he simply couldn’t find a house that he liked for a price he considered reasonable.
George Goognin, the millionaire founder of a fintech startup, moved to the U.S. two years ago from Russia. Though he looked at homes for sale, he rented the entire time he lived in Silicon Valley, Miami and New York because he couldn’t find anything he liked.