Business information written specifically for newspaper advertising departments

Is It a Renter's Market?

27% of renters have no interest in buying a home - ever. While, 72% of Americans still believe that owning a home is part of the “American Dream.”

The economic downturn was stronger than expected, and many Americans found themselves without a home and without a job. They could not afford to rent or own, so they ended up moving in with friends or family. Because of this, America saw declining occupancies and falling rental rates as many formerly owner-occupied homes turned into rentals, and the rental competition expanded.

Steve Bergsman, of Inman News, reported in his article “Balance Shift in Rent vs. Own Debate” that the rental market has begun to stabilize (except in severely damaged areas, like Las Vegas and Florida). Bergsman sited that current research is showing that “multifamily housing market has finally turned the corner since the start of the economic downturn in 2007…Apartment demand has recovered more rapidly than most observers expected.”

So you could say that what appeared to be a “renter’s market” at the beginning of 2010 has evolved into a landlord’s market. Even though, as Bergsman states, the scales are tipping in the favor of homeownership being the most cost-effective housing option, a growing number of Americans prefer to rent—at least for now. Trulia.com reported that consumer interest in buying a house has declined. They announced that 27% of renters responded that they had no interest in buying a house — ever. While 68 percent of the renters who thought that some day they would like to purchase a home, they expected it would be at least two years or more before they do.

This reluctance could potentially draw out the housing crisis recovery. Pete Flint, CEO of Trulia, stated that “renters converting into buyers are crucial to turning around the housing slump, but the current economic crisis is causing people to become hesitant to get off the fence and buy a home.”

The recession and shifting demographics will swell the ranks of people who will rent, not buy, housing over the next five years.”
~Gene Epstein

Has the American dream now become renting a home? No, the results from Trulia’s American Dream survey show that 72 percent of adults (a 5 percent decline from six months prior) still believe that the “American Dream” is to own a home. It’s just a dream that is still a couple of years away in most people’s eyes. Which is great news for residential rental properties or anyone renting an apartment, condo or home. In his article “Renters Nation,” Gene Epstein, of Barrons.com, reported that the flipside to the homeowner slide (from its 69 percent peak in 2004 to 67.2 percent in 2010) is the rising rental rate, “which probably will hit 36 percent by 2015, versus 32.8 percent in 2004” due to slow economic and job recovery.