Rising prices, strict loans, and a need for flexibility are causing more people to rent homes.
When it comes to home buying, fewer people are going it alone.
The percentage of homes purchased by single buyers across the country has fallen 10% since 2006. The drop comes despite an increase in the number of people who live alone.
“This goes completely opposite of demographic trends,” Redfin analyst Tommy Unger said. “This is really unexpected.”
But the trend is a reflection of a broad economic and cultural shift. Rising home prices and more stringent mortgage rules are making it more difficult for singles to get a mortgage on their own. At the same time, there’s a general unease about the strength of the economic recovery and the stability of the jobs market, changing the way many Americans view homeownership.
Even though many are eligible to buy, it’s hard for them to be willing to go another $150,000 to $200,000 into debt just to get a home.
Many of these singles have come of age at a time of high unemployment rates for young people, forcing them to live with their parents or friends even if they’ve landed a job or graduated from college.
Other singles prefer to rent because they want the apartment amenities and flexibility.
In the past, it might have made sense that someone who just moved out of their parents’ house would buy their own house. With the shakier beginnings that these young people have, that just might not be in the plans.
A chief economist for the National Association of Realtors, said singles buying homes face more restrictive mortgage lending standards than dual-income households, which are more likely to have higher credit scores. Many of these solo buyers are first-time buyers, who represented just 38% of all sales this year, a slight decline compared with last year.
This shift has caused a decline in the homeownership rate across the country and a growing interest in renting.
Flexibility is so much more important for this younger generation, and that’s tied directly to jobs. This generation is not like their parents’ generation when they had one or two jobs their whole lifetime.