Several housing blogs from around the country have recently released articles talking about a critical aspect of a report published by Harvard’s Joint Center for Housing Studies. The report has shown that high-income households which now live in rental properties have more than doubled since this time ten years ago.
Some industry blogs and standard news outlets are quick to explain this surge with their own set of talking points. Often you’ll hear talk about how people are just weary of owning and believe that renting is preferable and in some cases more affordable than owning a home. Some even claim the spike is due to the attitudes of baby boomers since the housing crash, not coincidentally, about a decade ago
There is little mention of anything about soaring home prices in the metro areas which are prompting more people to sell their homes and cash out on the investments they made 20-30 years ago. After all, home prices overall have jumped significantly over the last 30 years everywhere. Sure we had a recession in 2008-09, but the housing market has fully recovered in nearly all major metropolitan regions, in fact, most of those metros have surpassed home values from before the crash.
Noone seems able to provide a substantial reason for why wealthy people would prefer to rent. After all, they are wealthy, right? Have we considered the possibility that rising home prices could be pushing those with a higher income out of the market to buy? Not only are Middle-class families being forced out of the housing markets in many of the large metro cities, but there are also cases of middle-class families who are struggling to even afford rent in cities like San Francisco and New York.
No one seems to be able to explain with any validity what exactly is driving this surge in wealthy, older households who just seem to prefer renting. What is strange, however, is that most of the articles written on this report appear to make renting preferable to owning. However, all of these articles fail to explain how renting is superior to owning and investing in a home, especially for those who would be considered “wealthy.” Renting a house or an apartment is essentially paying for someone else’s mortgage, why would anyone want to do that when they can afford to buy? Renting does nothing to build personal wealth.
Stop renting and get out there and own a home. Better yet check out these rent for own homes.