Renting instead of buying — new American Dream?

The Wall Street Journal has a very interesting trend story today about the new American Dream — renting.

A growing number of families who have defaulted on their mortgages are concluding that renting a home is a better idea than buying one, the WSJ says.

Some are leaving behind their homes and mortgages right away, while others are simply halting payments until the bank kicks them out. In either case, the WSJ reports, that’s freeing up cash for them to use in other ways.

The U.S. home-ownership rate had its biggest decline in more than two decades, falling to 67.6% as of September from a peak of 69.2% in 2004, the WSJ reports. And more renters are on the way, the paper says.

Meanwhile, in another slap at home ownership, the AJC has been reporting in a special series that homeowners across metro Atlanta are victims of appraisals that are way out of line, given the collapse of the housing market.

So, what say you? Will renting become the new dream for many in the future? Is it for you?

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17 comments Add your comment

Observer

December 10th, 2009
8:32 am

Renting certainly offers a lot more flexibility. If you want to move to a different school district, you just pick up and move without having to worry about how long it will take to sell your home in the current market. It’s also easier to upsize or downsize quickly as circumstances dictate. If the house begins to fall into a state of disrepair, you simply move into another one – no need to worry about fixing things.

That said, I’d still rather own my home.

Trizzle

December 10th, 2009
8:57 am

I have rented my whole life. I would love to purchase a home, but being single without children it’s not really a good alternative for me. I do like the flexibility it provides and the limited responsibility for repairs. Maybve one day…..

Angela

December 10th, 2009
9:18 am

after this current down turn, my husband and I have decided to rent until we retire. We have to move alot, and have bought three houses since we have been married (9 yrs). Not only have we had to deal with crappy realtors, the economy has never been our friend when it comes time to sell. Once we sell this time (due to another move) we are never buying again.

I think the only advantage to buying a home in this country is if you have an uber-stable, high paying job, your 2.5 kids in a superb public school district, and a decent HOA or country home. Not many Americans have the luxury of obtaining this life combo, especially in Georgia.

Ryan

December 10th, 2009
9:31 am

If I would have kept renting 3 years ago instead of buying, my life would be so much better. Instead I owe about $30,000 more than my house is worth and everytime a house goes up for sale in my neighborhood I lose another 10k in equity. My entire street is made up of original owners who have lived in these houses going on 30 years so I thought I was moving into an established community but all it takes is 2 or 3 houses to go on the market and the rest of the home owners will suffer. The asking prices drop 10k every 3 months and still no one is even looking at them. No taxes, no hoa’s, no insurance, no repairs when renting. I remember hearing that “you’re throwing away money when you rent”, but isn’t that the opposite now. I’ll be stuck in my house for atleast another 10 years b/c there’s no other way out. I’m trying to resist renting it out but I might be forced to. WHAT A MESS!

Roekest

December 10th, 2009
9:49 am

A nation of renters and landlords……

Isn’t that what prompted many of our ancestors to come to America in the first place? The opportunity to own something for themselves? And now we’re just giving up??? Why? Because it’s too hard? The Great American Society is truly dead.

mitzymy

December 10th, 2009
9:59 am

I would much rather own a home than to rent an apartment. The landlords can come into your apartment anytime they think they have a valid reason, and look around. I rented a townhouse once and the maintenace man was constantly leaving notes for me. It was a weird feeling to come home from work and find out that he had been inside my home. I finally told him that until he started paying part of my rent, he was not to enter my apartment again without giving me notice in advance. He complied, and I had no trouble with him anymore. I think the tone of my voice let him know I was serious. A year later, I bought a house that was really a home. Renting is for people who move around a lot, but if you are stable and have a stable job, buying a home is for you. At least you aren’t throwing your money out of the window, as you do in renting.

The Doktor

December 10th, 2009
10:09 am

George Carlin (RIP) said it best : “That’s why it’s called The American Dream, cause you have to be asleep to believe in it…” ‘Nuff said… :-|

Rob Vinson

December 10th, 2009
10:13 am

I am a realtor and I think sometimes it’s better for people to rent and sometimes it’s better for people to buy. It depends on if a person wants to remain in an area, or does he or she want the flexiblility of not being tied down. A home is a place to live and hang your hat. It should not be viewed as an investment and too many people view it as that. A home can be a great investment, but one must do the due diligence to see if it the property will continue to be desirable in the years to come and will the property appreciate. Schools, location, proximity to certain things all help out with appreciation. People make money when buying real estate on the front end…when they buy it, they get paid when they sell it on the back end. There is a large supply of inventory available right now and interest rates are fantastic. The federal tax credit and state tax credit make buying now pretty enticing. However, it isn’t for everyone. It’s important to research areas where you want to live. Drive buy at all times of the day and night and on weekends. Be looking down the road if you had to sell your home. The schools and amenities need to be desirable to a prospective buyer. The neighborhood and properties in the vicinity need to be kept up. You want to be the cheapest home in the neighborhood, not the most expensive. Any decent realtor could help a buyer with these items. Renting is attractive to some people too though, so both of them have their pluses and minuses.

Sam

December 10th, 2009
10:43 am

I like my house…my property, and I look forward to paying off the mortgage or at least letting Chase carry the principle with little interest cost included.

EMMA

December 10th, 2009
10:49 am

*Rob Vinson*=Thanks for enlightening me on a few things. I read blogs not to put down anyone or agree or disagree on various topics but to learn things and to think about things that I might not have thought of myself or discussed in my inner circle. People think differently and sometimes I just need other ideas or differenct ways to look at things. Thanks again.

Ashley

December 10th, 2009
11:03 am

I am closing on my first home in January and couldn’t be more excited about it. I’ve lived in rentals (either apartments or rental homes) all of my adult life. Dealing with noisy neighbors, absentee landlords, and the inability to change what I dislike has driven me to become a homeowner. I am looking forward to having my own home with a yard and having the ability to do whatever I choose with my property.

Lloyd Braun

December 10th, 2009
11:40 am

If your housing doesn’t appreciate, renting is a far better financial choice too.
Mozel tov,
Brauny

LLila

December 10th, 2009
8:04 pm

I believe that if you wont a home that is yours you will make sacrifises to get that home. Thats what the Amreican dream is all about. Brlieve me I know. I can here from another country and foght. I have 9 children 7 of witch are married and own thier own homes. I also have a house that I’m satisfiyed with. I hate renting!!!!!

MrLiberty

December 10th, 2009
10:25 pm

There should be no manipulation of behavior via the tax code. The mortgage interest deduction is exactly that. The Federal Reserve artificial lowering of interest rates distorted the market, drove up prices, and gave everyone the false sense that home ownership was a profit making venture. Now the bust comes and everyone but the bankers and the government rulers suffer.

End the Federal Reserve. They have been a plague on this nation long enough. End the Income Tax. We flourished as a nation for over 125 years without one, and with one we are little more than slaves to our government.

One’s income should be used as one wishes without confiscation, and without manipulation by government scum.

dmac

December 11th, 2009
6:28 am

Over the past year, two million families have already suffered foreclosures. Seven million more may go down a similar path. As long as unemployment/under-employment continues on its lack-luster course, not only will homeownership rates continue to fall, the economy in general may stagnate.

[...] and rent has been on the decline in cities across the U.S. With all these factors, the U.S home-ownership rate has charted its biggest decline in more than two decades, falling to 67.6 percent as of [...]

karuna

December 12th, 2009
5:42 pm

i owned one condo in my 20s, selling during the late 80s condo glut. i got lucky as it was on the south side of charlotte, which has become one of the best areas to live in there. i sold it on a monday after listing it on a sunday, one day on the mkt… boy, was i lucky. i had rented it out to a tenant for a few mos and moved to downtown charlotte during my ownership, since there was no beltway at the time and i worked in the city. commuting was a stomachache every morning. what a nightmare [the tenant]. she skipped out on me in the middle of the night [lying all along], let the pipes burst and left it in squalor. that cured me of ownership until the age of 40. bought another townhouse in sandy sprgs, again made it charming, sold it in 3 wks, moved to st. simons for a job. i saved, i invested, i rented a furnished condo on the Intracoastal, i helped my parents, i took care of my father during a paralyzing stroke [for 2 yrs], did a little traveling and enjoyed my life. in 2005, unbeknownst to me at the “height of the real est bubble”, i bought an 1890 Victorian in coastal GA – was doing quite well financially. everyone said “buy real est”, “buy property… it’s the only way to have anything when you retire”…. blah blah blah… that’s ALL we heard and read. in my heart i felt i was an idiot to want to continue renting, fearing some unfortunate, unforeseen event would disrupt my peaceful NO DEBT existence. but alas, i listened to the “Experts”… the “gurus”… the omniscient financial planners and CPAs… i started buying property {ies}. well, didn’t take long for the ‘bloom to be off the rose’; the mkt collapsed from corp greed, people’s personal irresponsibilty –at the time i could afford all these things, but soon realized as the spiral down got worse and worse, that i was a “victim”, too, of the ubiquitous frenzy from the sanctimonious know-it-alls who raped and pillaged and pilfered all of our savings and investments and drove our property values down with their dripping tongues of salivating LIES. cut to now…. 2 investment properties are in foreclosure; i may get lucky by doing a DIL; i’m a realtor and have hardly made any money in real estate, am barely hanging on — not much selling, not many buyers, you know the drill. you read the papers. i’ve decided that IF i get out of his surreal financial mess, i may *never* [yes, that's a serious word when anything can happen] buy again. my dream is to teach overseas, travel somemore, enjoy my life, be DEBT free [the only way to EVER be free from govt controls and gouges] and spend more time with my mother. the father passed before i could make enough money to get him out of the nursing home… which was my goal. live and learn, right? i guess the alternative is the dirt nap, but…. nah, i’ll take the Eurail anyday !