Business

More than half of Gen Z says renting is a better option than buying a home

FILE - A "For Rent" sign is displayed outside a building in Philadelphia, June 22, 2022. The cost of renting an apartment is easing after skyrocketing in recent years, though it remain painfully high for many Americans. The U.S. median rent rose 2.4% in January 2023 from a year earlier to $1,942, the lowest annual increase since June 2021, according to data from Rent, which tracks listings for apartment and rental houses. (AP Photo/Matt Rourke, File)

High housing prices nationwide are leading many to view renting as a smarter move than purchasing a home, according to a report released Tuesday. 

More than two-fifths — 44 percent — of renters surveyed by RealPage said that renting is a better option than buying. The top reason among all surveyed was affordability. 

Broken down by generations, Generation Z renters led the way, with 51 percent saying renting is the best choice. 

For the survey, RealPage asked 25 questions to 2,000 multi-family renters ages 55 and below across the country whose income ranged between $20,000 to $200,000. 

Nearly two-thirds of renters said they are satisfied with their current rental situation as it gives them greater freedom to move and more financial flexibility. Close to three-quarters said renting allows them to live in neighborhoods they could not otherwise afford. 

“The research tells us that most apartment renters are happy being apartment renters,” Jay Parsons, chief economist for RealPage, said in a press release.

“Older renters say they’re renting because it frees them up from home maintenance and other responsibilities,” he continued. “Younger renters are renting because it gives them more flexibility. And renters of all ages tell us that apartments provide an entry into preferred neighborhoods where they couldn’t afford to buy.” 

Home prices are rising again after cooling off for a period amid the Federal Reserve’s effort to slow inflation by raising interest rates. 

A lack of homes also continues to prop up prices to near record highs, and stubborn mortgage rates are making monthly payments even more unaffordable for prospective buyers.  

This pushes many people back into the rental market where prices are also high. 

Rents have cooled over the past year, but they are still rising. Data from the real estate company Zillow found that asking rents increased by 0.5 percent in July, bringing the typical monthly payment to $2,062. 

The most expensive rents were in major metros along the coasts, Zillow’s report found. Asking rents were highest in New York City in July at $3,445, beating out San Jose, Calif., by $20 per month.