Thursday, May 31, 2007

Survey Suggests Homeowners View Renting in New Light

Arlington, Va. -- A new survey commissioned by the National Apartment Association (NAA) has found that an unpredictable housing market, marked by uncertainty in
mortgage rates and concerns about rising foreclosures,
indicates that many homeowners view renting apartments more favorably than they have in the past.

More than 2,100 people who own houses, townhouses, condominiums or co-op units were surveyed between April 26 and 30 by Harris Interactive, a market research firm. The survey found that 65 percent of homeowners believe that, given the current state of the real estate market, there are many advantages to renting.

“The survey reflects a notable contrast to what we traditionally see,” says Douglas Culkin, NAA president. “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.”

Surveyed homeowners said that the advantages of renting include no exposure to foreclosure, the impact of an unpredictable real estate market, and interest rates. Only 54 percent of homeowners cited the inability to build equity when renting as a major concern. Sixty-two percent of homeowners said that a potential lack of privacy is a more serious issue.


I believe the trend is more prevalent than the survey suggests. I know of a number of people (known as ‘Bubble Sitters’) who sold their homes, some more than a year ago in anticipation of a huge market correction. If you peruse the housing market blogs you will find even more evidence of this trend.

I myself am a Bubble Sitter. My younger brother is a bubble sitter as well. In the past renters have acquired a bad reputation as shiftless, under-motivated, or just plain losers, but this is no longer the case.

The face of renters is changing. Chances are better that you will now find an educated professional renting, waiting for the market to loose its froth. It makes sense. After all, if you buy, you are merely renting money from the bank and the rent you pay is referred to as interest payments. That money is paid out by you and does not build equity, same as rent to a landlord. Rent however is often less than the typical interest payment on a comparable house. That’s just one of the benefits of renting. Another is flexibility, and no exposure to a market downturn or foreclosure.
Vern

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