“This survey reflects a notable contrast to what we traditionally see,” said National Apartment Association (NAA) President Douglas Culkin. “In the past, people who own their homes have generally seen renting an apartment as a stepping stone to homeownership. That phenomenon has by no means disappeared, but, across the nation, we’re seeing more and more consumers opting to rent, instead of own.”
Among the key advantages of renting versus owning, homeowners cited:
* No susceptibility to foreclosure (25 percent)
* Not being impacted by an unpredictable real estate resale market (23 percent)
* No fluctuating interest rates (23 percent)
Only 54 percent of homeowners cited the inability to build equity if renting as a major concern about apartment or condominium living. Interestingly, a larger proportion of homeowners (62 percent) cited potential lack of privacy as a more serious consideration.
“There’s been a lot of discussion of the economic fallout of sub-prime mortgage lending that happened over the last few years,” said NAA’s Culkin. “However, little attention has been paid to how the crisis has affected current homeowners’ views of homeownership as an investment choice.”
“Make no mistake, these things are cyclical,” said Culkin. “However, this survey reflects an interesting view of how homeowners value their home equity — and in our industry, we don’t see this changing anytime soon.”
Adding to the complexity of the issue is the fact that homeowners who have lost, or may soon lose, their homes to foreclosure are now facing the added difficulty of failing to qualify as creditworthy apartment renters.
In an effort to help these “born-again renters,” NAA, in collaboration with the National Multi Housing Council, is “proactively engaged in finding ways to address the growing credit problem and assist consumers in getting into apartment homes. There are a lot of people out there who need help,” said Culkin. “We want to do all we can to help them.”
