Why Millennials Are Renting More — And Why It Works for Them

When deciding between renting or owning, young people today face a pivotal choice as they establish their personal and professional lives. According to Pew Research Center data from 2017, millennials are renting more than ever before.

The table below shows the percentage of movers aged 25 to 35 who chose either owner-occupied homes not owned by their parents or rental properties. (About 4% of movers in each generation moved into parent-owned homes).

Millennials rent at a significantly higher rate than previous generations for three main reasons:

1. The Impact of the Great Recession

The recession lasted from December 2007 to June 2009, but its effects linger. Millennials face higher student loan debt and a tough job market, delaying important financial decisions like home-buying.

2. Delayed Life Milestones

A 2013 Gallup poll showed that while millennials value marriage and children, they’re taking their time. Many feel less pressured to commit to a specific lifestyle, influencing their decision to postpone home purchases.

3. The Housing Bubble

Before the recession, the housing bubble contributed to the financial crisis. The resulting foreclosures and stricter mortgage qualifications made it challenging for millennials to secure loans, especially with student debt and a poor job market.

Why Renting Works for Millennials

While buying a home offers benefits like building equity and potential tax deductions, renting often aligns better with millennials’ lifestyles. A Rent.com survey of renters aged 18 to 34 found that nearly 80% don’t plan to buy homes anytime soon. Here are four reasons why renting appeals to them:

1. Budget-Friendly

With student loans affecting their finances, many millennials prefer renting to taking on a mortgage, along with associated costs like closing fees and property taxes. Renting often proves to be the more economical choice.

2. Flexibility

Renting allows millennials the freedom to travel or move to a better neighborhood without being tied down by a mortgage. As job tenures decrease, temporary leases offer the chance to pursue new opportunities.

3. Prime Locations

Renting enables access to trendy, desirable neighborhoods that may be financially out of reach for homeownership. It’s a great way to experience a community before making a long-term commitment.

4. Maintenance-Free Living

Homeownership comes with responsibilities like yard work and repairs. Renting typically shifts these burdens to landlords, allowing millennials to enjoy their free time without the stress of upkeep.

To Buy or Not to Buy?

There’s no definitive answer to whether buying or renting is better; it ultimately depends on individual circumstances and priorities. Consider what aligns best with your lifestyle before making a decision.