Rent Forever: The Share of Millennials Who Say They'll Never Own a Home Is Surging (2024)

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Rent Forever: The Share of Millennials Who Say They'll Never Own a Home Is Surging? ›

New survey data from Apartment List shows that in 2022, 24.7% of millennials said they plan to “always rent” rather than buy a house. That's nearly double the portion that said the same in 2018 (13.3%).

Millennials have been hit hard financially, with more debt and a lower net worth than their parents had at the same life stage. Growing that wealth has been made more difficult due to the drop in housing supply over the last 15 years, which has pushed prices up and made it that much harder to get into the market.

Apartment List says the number of millennials who say they'll be renting forever has doubled in a decade and the percentage of millennials who own homes here in the Bay Area is among the lowest in the nation.

Instead of pursuing the traditional American Dream, Millennials believe that their wealth will be in their savings account and, most importantly to them, the experiences they gain while living. As such, the short-term costs of renting are far easier to bear than those that come with purchasing a home.

A lack of inventory, soaring prices and elevated mortgage rates have left a growing number of individuals and families with no choice but to rent indefinitely. This new reality has given rise to a term that captures the essence of the era: "forever renters."

Affordability is a challenge for Gen Z homebuyers, but it's also a challenge for millennials and buyers of other generations. The Gen Zers now in early adulthood have had less time to accumulate savings than previous generations, which could make it more difficult to become a homeowner in the short term.

Although that gap has narrowed significantly — the Fed later updated its research with data through 2019, finding Millennials were just 11% below wealth expectations — older Millennials also had the highest debt burden of any demographic group, making them particularly vulnerable to economic shocks. Like a pandemic.

What the data shows. New survey data from Apartment List shows that in 2022, 24.7% of millennials said they plan to “always rent” rather than buy a house. That's nearly double the portion that said the same in 2018 (13.3%). Apartment List defines “millennials” as those born between 1981 and 1996.

Recent survey data from Apartment List paints a vivid picture of the shifting attitudes of millennials toward homeownership. In 2022, a significant 24.7% of millennials indicated that they plan to "always rent" rather than pursue the path of homeownership.

Per RentCafe, Gen Zers can expect to shell out $145,000 on rent alone before they turn 30, whereas millennials only spent $127,000. With the rate of inflation and the skyrocketing cost of living, Gen Zers in their twenties currently spend about 27% of their income on rent.

Why the rich are renting instead of buying? ›

Many wealthy individuals would rather save money by renting and put their dollars to work somewhere else. Instead of tying up your money in an illiquid asset like a home, one could invest it in the stock market, which often performs better.

From July 2021 through June 2022, 70% of younger Millennials and 46% of older Millennials were first-time home buyers, according to NAR. In 2022, 62% of 40-year-olds were homeowners.

We've already established that rent in California is almost universally cheaper than making a mortgage payment. But there are other expenses to keep in mind, as well. If you rent, you don't pay property taxes, HOA fees, or other associated costs.

Measures of overall happiness confirm that homeowners are more satisfied than renters. Homeowners rate their overall happiness as 7.5 out of 10 on average, compared to just 6.2 for leaseholders. Homeowners and renters agree that the top benefits of ownership are privacy and stability.

'America will become a renter nation': Grant Cardone warns the US could see 100-year mortgages — says we might even rent our clothes. How to buy real estate without going deep into debt. With elevated interest rates and persistently high home prices, American homebuyers have felt firsthand the squeeze on their budgets.

Almost half of all renters stay in their home for three or more years, and one in five stay for 8 or more years. A survey by the National Multifamily Housing Council found that about one-third of current renters would prefer a lease term lasting more than one year.

By age 30, just 42% of millennials owned homes, compared to 48% of gen Xers and 51% of baby boomers, an analysis of government data by Apartment List found. This gap persists into their early 40s, with the oldest millennials still having a lower rate of ownership than previous generations when they were that age.

Millennial Home Buying Statistics By Location

States with the highest share of millennial homeowners in 2019 were Utah (59%), South Dakota (58%) and Oklahoma (57%)¹¹. States with the lowest share of millennial homeowners in 2019 were California (30%), New York (30%) and Texas (39%)¹¹.)