The American Dream Now Rents

The long-held notion of the American Dream has always included owning a home with the proverbial white picket fence. Today, that dream has become unpractical for many Americans. The unstable job economy paired with the recent bust of the housing market has put home ownership out of reach for many families. Once you look past the dream, however, there are some real benefits to renting a home rather than owning it yourself.

Neighborhoods Improved by Rental Homes

The high rate of foreclosures in recent years has left many neighborhoods full of empty homes. Renting those homes has helped to revitalize those neighborhoods and clean them up as families begin to take care of the houses once more. Everyone wins when a foreclosed home comes up as a rental because the property will have a chance to bring in money once again and the new residents will have an affordable place to live. Research shows that home ownership in the United States is at its lowest level since the 1960s, while renting trends should continue to rise by the millions over the next 10 years.

Renting Provides Flexibility in an Unstable Economy

One of the reasons rentals are more attractive to families right now is because the job market is so unstable. People who are not sure if they will still be working for the same company in two years need the ability to move if a job opportunity arises elsewhere. Owning a home can make it difficult to leave when you need to go to a new city for work. A rental house provides all the comforts of living in a single-family home with the flexibility of leaving any time you need to make a change.

Ownership Requires More Investment

A practical reason for choosing to rent rather than own is that ownership requires far more time and money than renting. The owner is responsible for keeping the property in good working order at all times. When you rent, you have the luxury of calling someone else when the air conditioner stops working or the sink backs up. If you own the house, you are the one who has to deal with the troubles of things breaking. Owners are also responsible for replacing carpeting or painting the walls if the house becomes worn down. If you don’t own the home, you don’t have the financial responsibility for maintaining it.

Buying Is Better than Renting for the Long Term

In a direct cost comparison over several years, the benefits of renting a home lose to the benefits of owning a home after five years. For the first five years, a renter is financially ahead of the game. After five years, a homeowner saves money and has a better investment by owning the property. Renting makes sense in shorter increments, while owning creates more financial stability for the long term. Homeowners save an average of $1,500 more per year than renters do after five years of living in the same house.

By Jessica Bosari

21 Responses to The American Dream Now Rents

  1. We own our home right now, but I think I enjoy renting too. Especially given that we move every 3 or 4 years (military). I am thinking I don’t want to own again, if we can even sell our home.

  2. There’s no right answer when it comes to renting vs buying. It all depend on your individual circumstances and priorities. Personally I prefer ownership, but renting has its advantages.

  3. It’s pretty frustrating that as soon as I decide to rent vacancies are down and rents are up. It was so bad that I considered buying a house but when I thought about the additional costs of maintenence and repairs I reconsidered!

    • Rental properties scare me. I watched my father struggle (and continue to struggle) with multiple properties…but at the same time those properties provided him with the income and leverage ability to provide for the kind of life that I did.

  4. This is exactly why I am renting now, but still house hunting. Lots of good opportunities with no pressure to buy right now.

  5. I just bought a home less than a year ago — the housing crisis has provided lots of great opportunities for buyers who were previously priced out of the pre-crash market.However, owning a home is more expensive than I realized … we need to pay insurance, taxes, and buy all kinds of junk (a tall ladder so we can reach the 2nd-floor exterior for minor repairs, a lawnmower, a chainsaw, etc.)

  6. Hey Evan, How’s it going? I’m on hiatus with my political blog – set up a new one right now. I also just followed you on twitter. Switching gears for a while. LOL. The political scene is draining me. I’m sure you’ll figure out who this is. :)

    Anyway – with regards to this topic – a LOT of the homes in my neighborhood are in foreclosure right now and/or many have just walked away from their homes. I’m so far under water myself that I can’t even refinance. Even with a 125% LTV it doesn’t come close to my outstanding loan balance. Renting is definitely a great choice in this economy right now. I’m not struggling to make my payments – but – I also cannot afford to sell my home as I would take a huge loss. Essentially, we’re trapped in this home until the market rebounds. If you have the money – it is a buyer’s market right now.

      • Not really. I’m having no problem making my payments and am in no danger of foreclosure at this time. It just sucks that I’m trapped. If there ever does come a time when we would have to move – if the market hasn’t rebounded and I find myself still under water – you can bet strategic default is on the table!

        • I get the feeling. We live in a home that has to be sold through an organization and it is the feeling of “will I ever be ABLE to get out”

  7. I am finding that both, my parents and parents of friends (Canadians) are getting really excited about buying US property right now as well. It is a great market for that.

  8. I cannot agree with you more about the economy. It is sad that Americans have to work so hard to make the dream. Whats really scary is that we keep getting taxed and Americans accept that. One day the Government will take everything we own and we all will be living in little huts. Sorry for ranting here, but its true. We work hard, we don’t see our children and we can’t afford a decent home. I really worry about our children’s future. As always, I enjoy reading your blogs. Good luck my friend.

  9. I own and I am glad I do. But I also live in an area where home prices are still extremely affordable. My mortgage (thanks to my putting 30% down when I built) is lower than most rent in our area. Of course, there are other expenses with owning a house but for me, those are worth the investment.

    • Where do you live? I find it amazing the price differences throughout the Country.

      I know bloggers whose mortgage payment is less than my homeowners insurance + Maintenance combined.

      I need WAY north of $100K CASH for my next home.

  10. There are a ton of costs besides the mortgage that come along with home ownership. But you also gain a measure of control over your surroundings. Right now, there’s no way it would be cheaper to buy a house than to pay rent, even over a 5 year term, because I have such low rent. But the intangible benefits of home ownership should be factored into the decision too.

    • What about the intangible benefits of renting? i.e. if the roof leaks you call the landlord instead of the plumber and roofing guy

      • Well, I’d count that in with the tangible benefits of renting, and the tangible costs of owning.
        By “intangible” I meant the qualities that you can’t really put a price on.

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