As sales of existing housing reach a three-year low, more and more people are looking to renting as an affordable housing option. This trend towards renting extends beyond the housing market, affecting travelers as well.
Home Sales Continue To Decline
Recent data from the National Association of Realtors shows that existing home sales fell to a three-year low in recent months as home prices rose for the 79th straight month. After six years of consistent increases in home affordability, many looking to own homes are avoiding making their home purchases due to rises in costs.
Some markets are much worse than others, too. The median home price in Suffolk County, NY, for instance, is $415,000. Previously, the lack of people purchasing homes has been blamed on a decreased inventory; however, as time goes on, the blame has been shifting to ever-increasing prices. With little in the way of evidence that the housing market is going to change any time soon, more and more people are putting homeownership on hold. Instead, these would-be homeowners are opting to rent their homes, often inadvertently at great costs.
Renting Perceptions Improve, Despite Evidence
Public perception has favored renting as the more affordable option. Today, 78% of people believe that renting an apartment or home is more affordable than homeownership. This is in spite of the fact that 66% of renters reported difficulty making rent payments over the previous two years.
Despite the many differences various generations experience when it comes to the perception of financial and economic issues, renting does not seem to be among them. A majority of survey respondents across all generations surveyed stated that they viewed renting as a more affordable option than homeownership. Baby boomers had the highest percentage of individuals that saw renting as the cheaper option, with 81% of surveyed baby boomers stating that homeownership was more expensive.
Renting Popular With Travelers
The public perception of renting has not only impacted the number of people postponing house purchases. More travelers are opting to rent their long-term and short-term travel accommodations in recent years. In a 2016 survey, the Hawaiian Tourism Authority found that 7.4% of visitors to the state stayed in a “rental house,” as opposed to traditional hotel accommodations.
Additionally, the number of people opting for rental options for longer-term vacations or travel remains high. Rather than staying in a hotel or similar lodging, many choose corporate housing as a temporary option. 40% of people who use corporate housing do so because they are relocating. Rather than purchasing a home in their new location, they opt for rental housing, in part due to the public perception of affordability.
Whether the housing market will improve to levels able to compete with the rental market remains to be seen. Regardless, this trend is clearly a well-established one, and is likely to continue for at least some time.