2014 is shaping up to be the year when renting an apartment became a more popular choice than owning a home.
According to a June 20 CNBC article, the national apartment occupancy rate continued to soar throughout the month of May, reaching its highest level in six years. An amazing 95% of apartments across America are currently occupied — and developers are rushing to construct more to meet demand.
Americans’ gravitation toward renting an apartment rather than buying a home marks an important shift away from the traditional “American dream,” in which everyone was expected to own a home to be considered successful.
“The American people believe that the country’s housing environment is changing,” a MacArthur Foundation report called “How Housing Matters: The Housing Crisis Continues to Loom Large in the Experiences and Attitudes of the American Public,” said, according to the Washington Post. “While most non-owners aspire to own a home someday, homeownership is not viewed as the vehicle to building wealth that it once was, and the public believes that renting has grown in appeal while owning has declined.”
Svetlana Mosyurova says she has noticed an influx in demand for rentals in Philadelphia, where the average cost of renting an apartment is $819 per month.
“We are seeing an increase in demand for luxury Philadelphia apartment rentals that are affordable and offer a wide range of amenities for young professionals and millenials. We’re also seeing a surprising number of people who are moving to Philadelphia from other places which is an encouraging sign for our city,” says Svetlana Mosyurova, Marketing Executive, Post Brothers Apartments.
Over the last year, some 180,000 new apartments have been constructed across the country, CNBC reports. Even so, the price of renting has remained strong, growing by 3.5% in May. This is because young Americans are still facing a tough job market along with mountains of student debt and lowered confidence in the viability of a house as an investment.
The rising price of buying a home also makes renting a financially-viable choice. According to the New York Times, home prices throughout the country’s 20 biggest metropolitan areas grew an astonishing 12.4% between March 2013 and March 2014. Renting, in contrast, allows an individual to know how much to appreciate without making any long-term commitments.
As more and more Americans turn toward renting their living space, the U.S. housing market will undoubtedly continue its drastic post-recession evolution.