*They’re calling it Generation Rent. U.S. home ownership rates have been falling, particularly among younger Americans. Home ownership reached a 20-year low of 63.7 percent, according to Harvard’s report on The State of the Nation’s Housing 2015. Home ownership is falling fastest among Generation Xers in the 35-54 age bracket. Millennials exhibit the same trend, and will make up 31 percent of rental growth over the next decade, the 2013 Current Population Survey projected. Futurist Hugo Garcia foresees a future where rental is more common than home ownership. Whether this emerges, renting is a reality for many young parents today, and families are adapting to adjust to the rental lifestyle.
Reasons for the Rise of Renting
Harvard’s study identifies several reasons for home ownership decline and rising rental among younger Americans. Just before the housing market crashed in 2007, older Generation X members were at the stage where homeowners tend to make home improvements or upgrade to a more expensive home, while younger members of this age bracket were in their first-time home-buying years. Consequently, when the housing market crashed, many of these homeowners had no equity to endure the recession.
Millennials, meanwhile, found themselves burdened with excessive student loan debt and struggling to keep up with rent, leaving nothing left over to pursue home ownership. Over a decade, the percentage of renters aged 25 to 34 who were paying more than 30 percent of their income for rent increased from 40 percent to 46 percent, while those paying over half their income for rent rose from 19 to 23 percent.
On top of these trends, other factors accelerated the trend of renting. Declining income, rising debt, falling credit ratings and tighter financing have all driven the decline of home ownership among younger Americans. In metro areas, like Seattle and New York City, as well as coastal cities like San Diego and Newport, renting is often a more plausible and affordable option for many. Demand for rental housing rose for the tenth consecutive year in 2014, reaching a 20-year high and outpacing the demand for rentals in any previous decade.
How Renters Are Adapting
While those who aspire to traditional home ownership might see this trend toward renting in negative terms, younger Americans are bound to make the most of it, and many are even starting to see the benefits of renting, as NPR reports. For one thing, those who’ve seen their family and friends struggling to sell homes with diminished value count their blessings that they’re not stuck in this frustrating situation.
Others recognize the benefits of not taking on long-term mortgage debt or tying themselves down to one location. In an economy where jobs are increasingly mobile, many young professionals see the ability to move without having to sell a home as a career advantage.
Some like the safety of having many apartments or home together, or having security guards or security cameras onsite.
Not having to pay maintenance or repair bills or property taxes adds more incentive to rent rather than owning property. Renters also often have the advantage of access to amenities such as swimming pools or fitness centers that many homeowners can’t afford.
Raising Children as a Renter
Part of adjusting to being a renter means learning how to raise kids in an apartment. While living in a small space with children is obviously challenging, Antelope Media director Emma Sorensen points out that the smaller living space has the positive effect of bringing families closer together. You share your children’s lives more intimately, reducing the risk of them getting into mischief outside your supervision.
Robert and Cortney Novogratz have successfully raised seven children in an NYC two-bedroom apartment, and have shared some tips about how to make a rental space feel more like home.
Keeping clutter to a minimum and tossing out excess toys will allow you to make better use of your space. Give each child a workspace and creative tools such as sketch pads and crayons to keep them constructively entertained. Use color, art, and music to add atmosphere.
Bring the outdoors in with flowers and floral designs to add a natural touch. Give your apartment personality to make it feel like home.