Large percentage of consumers turn to renting

November 6th, 2012

More consumers turn to renting as homeownership becomes less affordable.

In recent months, mortgage service companies have experienced an uptick in the number of home loan applications they have received. However, this trend may change in the upcoming year as more Americans turn to renting rather than homeownership.

The Freddie Mac Multifamily Research Group released new data revealing that multifamily renter households are expanded to increase by 1.7 million between 2012 and 2015. A heightened demand for rental properties is expected to remain consistent during this period as well. The report reveals that high foreclosure rates, difficulties qualifying for competitive rates and economic uncertainty are beginning to affect Americans’ confidence in homeownership. As a result, rental demand is expected to grow at faster rates than historical averages.

“The economic data indicates that current rental markets are very strong with low vacancy rates, rising rents and solid demographic trends,” said David Brickman, senior vice president of Freddie Mac Multifamily. “What this research demonstrates is that these conditions are likely to remain in place for several years to come.”

Renting is not for everyone, nor is homeownership. It’s important that individuals weigh the costs of each housing option and work with both a rental agency and a mortgage consultant to determine which option is best.