When we think of renting, we often think of housing. However, many Americans opt for a rent-first lifestyle — clothes, cars, furniture — in many aspects of their lives.
A recent Intuit Credit Karma survey found that as many as 1 in 4 Americans prefer to rent goods over purchasing, and 58% of those said they do so because of personal preference, not because of affordability or other pressures.
What Americans are renting:
- Car — 17%
- Clothing/accessories — 9%
- Electronics — 8%
- Furniture — 7%
The number jumped to 47% when surveyors were asked if they rented their homes.
“Over the last decade we’ve seen the ‘rental economy’ gain popularity as more opportunities to rent goods and services have flooded the market,” Credit Karma consumer financial advocate Courtney Alev said of the survey, per Credit Karma.
“Renting can serve various needs for consumers, whether they’re seeking flexibility, minimalism or savings. That’s not to diminish the current housing affordability crisis that’s standing in the way of many renters’ ability to achieve homeownership. Whatever the case may be, before fully embracing a rent-first lifestyle, consumers should evaluate all of their options to see how they stack up to their goals and aspirations,” she added.
Is renting property the best option?
Purchasing rather than renting is usually the best option for long-term affordability. However, high mortgage rates have prevented many current homeowners from selling their homes and entering the market and halted many new owners from making the purchase.
According to Freddie Mac, the current 30-year fixed-rate mortgage is 6.49% as of Aug. 15. This week, four years ago, the same rate was 2.99%.
Across the U.S., “The typical home costs nearly 37 percent more to buy than to rent on a monthly basis,” per Bankrate. “Rent increases have softened across the U.S. over the last year, and the combination of high home prices, elevated mortgage rates and low housing inventory creates a strong headwind for aspiring homeowners.”
That said, people would still buy rather than rent if affordability weren’t an issue. The Harris Poll survey found that 48% of Americans said they would purchase if they had the funds to do so, while 28% said they wouldn’t buy because of high mortgage rates.
Why people are choosing to rent:
- Buying doesn’t make financial sense — 13%
- Allows money to be spent on other things — 15%
- Buying is too much maintenance — 16%
- Renting is saving them money — 16%
- Don’t want to live in the area long term — 18%
- Renting is less stressful — 20%