More than 50% of Americans opting for 'rent-first' lifestyle, survey finds
Home prices are finally starting to fall
In a good sign for homebuyers, the share of available listings that saw a price cut jumped to 18.9% in July – up 3.4% from the same time last year, and the highest level in two years, according to a new report published by Realtor.com. Price cuts are atypical in July, which is usually a peak time for home sales. But this year is different, because sellers are trying to lure back lukewarm buyers who are facing both high costs and steep interest rates.
LOS ANGELES - As the concept of renting continues to expand beyond housing, a new study by Credit Karma reveals that a significant number of Americans are choosing to rent goods and services as a lifestyle preference rather than out of necessity.
The study, conducted by The Harris Poll, found that nearly 3 in 5 Americans (58%) who rent or lease goods and services say they live a rent-first lifestyle, driven by personal choice rather than affordability concerns.
Americans prefer renting for its flexibility and savings
According to the study, 28% of Americans rent or lease various goods and services, with flexibility being the primary motivator. Over a third of respondents (35%) cited the flexibility that renting offers as the main reason for choosing to rent, allowing them to avoid long-term commitments and adapt to changing needs and circumstances.
Additionally, 31% of renters noted that leasing or renting helps them save money, while 27% appreciate the ability to try out items before making a purchase.
The appeal of renting extends beyond practical considerations. The study found that 57% of Americans who rent or lease goods and services value the flexibility of renting more than the benefits of ownership.
Renting goes beyond housing, impacting other aspects of life
While the rent versus buy debate is traditionally centered on homeownership, the study shows that renting has permeated many other areas of life. From clothing and accessories to cars and electronics, Americans are embracing the rental economy across a wide range of goods and services.
For example, 17% of respondents lease cars, with many citing the desire for a new vehicle every few years or the opportunity to drive a luxury car they couldn’t afford to purchase outright.
Fashion-conscious consumers are also turning to rental services to experiment with styles, keep up with trends, and access luxury items. More than 2 in 5 (41%) of those who rent clothes or accessories do so because they believe it is the more affordable option, while others appreciate the sustainability aspect, with 29% saying they rent for environmental reasons.
The housing affordability crisis drives home rentals, but attitudes are shifting
Unsurprisingly, the study found that the primary reason Americans rent their homes is due to affordability issues. Nearly half of home renters (48%) said they rent because they cannot afford to buy a home, and a quarter (24%) pointed to high mortgage rates as a barrier to homeownership. Despite these financial pressures, the study also reveals a shift in attitudes, with 60% of Americans who rent or lease goods and services believing that the idea that buying is always better than renting is outdated.
Courtney Alev, consumer financial advocate at Credit Karma, notes, "Over the last decade, we’ve seen the ‘rental economy’ gain popularity as more opportunities to rent goods and services have flooded the market, offering consumers short-term access to a plethora of items. Renting can serve various needs for consumers, whether they’re seeking flexibility, minimalism, or savings."
Evaluating the rent-first lifestyle
While the flexibility and savings associated with renting are appealing, Alev advises consumers to carefully evaluate their financial goals before fully embracing a rent-first lifestyle.
"If their top priority is to save to buy a home, but they also lease a luxury vehicle and pay a monthly clothing subscription service, they may want to crunch the numbers to make sure they’re on the best path forward to saving for a home," Alev suggests.
As the rental economy continues to grow, more Americans are questioning the traditional emphasis on ownership, opting instead for the flexibility and benefits that renting can offer across multiple facets of life.