According to a recent article in the Wall Street Journal, renters are the majority in big U.S. cities! There has been a significant shift in the number of renters, resulting in renting becoming the norm for big cities across U.S., and even smaller, less expensive cities as well.
With this rise of renters, the demand for apartments has skyrocketed, creating a huge problem as cities struggle to keep up with the demand. As a result, vacancy rates have fallen, rents have soared, and renters struggle to find a place to live in the highly competitive market.
So then what are the reasons for this shift in the majority?
1. Hesitancy to buy after the housing crisis:
Many people have turned to renting over buying as a result of losing their homes to foreclosure during the housing crisis, harming their credit, or because of a hesitancy to own. Take Chicago for example. In 1990, 53% of the Windy City’s population rented, dropping to 46% in 2006, and returning to 52% in 2013.
2. Diminished appeal in homeownership:
Millennials striking out on their own, many for the first time, want the ability to up and move at a moment’s notice from Dallas to Denver, something made much harder when having to sell your home first in order to do so.
3. Slow income growth and lack of savings:
Rents are rising, whereas income has generally stayed the same. When most of your income goes towards paying rent, it’s nearly impossible to start saving for those big down payments required to buy a home. People now have to rent longer until they’ve accumulated enough in savings to actually think about buying.
With these trends, economists predict that the number of renters will continue to rise and remain the majority in big U.S. cities across the nation.
Read the full article at: http://online.wsj.com/articles/renters-are-majority-in-big-u-s-cities-1423432009