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Why Are More Americans Renting Instead of Buying?

Posted on: February 24, 2015 by Newmark Insurance

Despite the recent boost in the American economy, consumers do not seem to be spending as freely as they were before the recession, a trend that has spilled over to the residential real estate industry. As a real estate agent, you have many financial considerations to make; including acquiring the right Real Estate Professional Liability Insurance and ensuring that you have a business plan in place that aligns itself with spending trends.

According to recent reports via Zillow, buying a home in America is, on average, cheaper than renting; with data showing that the average renter who signs a lease today may be spending twice the percentage of his or her income to pay the rent than the average homeowner would be paying towards a mortgage. Renters generally earn lower salaries than their home-buying counterparts, so why the seemingly contradictory data; that more people are buying than renting?

Some speculate that it’s due to the generational difference of today’s young Americans versus the generation before. Millenials, who are more likely to “job-hop” and often have high student loans to pay off, in a not-so-bright job market, saw their parents go underwater on mortgages and don’t want the same for themselves. They are also less likely to want to commit to one living area for an extended period of time, and are even waiting longer to get married and have children. Therefore, the need to “settle down” is lesser for today’s young Americans.

Experts optimistically home that at some point rent will become expensive enough to make homeownership seem like a far better option. Until then, it’s important more now than ever as a real estate agent to work on growing your business and encouraging word-of-mouth business. At NewMark, we understand the unique risks you face in your business practices every day, which is why we offer comprehensive insurance policies to meet your needs. For more information, please contact us today at (855) 777-6549.

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