Homeowners vs. Renters Statistics (2023) (2024)

FAQs

Homeowners vs. Renters Statistics (2023)? ›

“A monthly mortgage payment is often considered a forced savings account that helps homeowners build a net worth about 40 times higher than that of a renter.” Along with these wealth gains, homeowners also saw their debt drop by 21% over the last decade, the report shows.

“A monthly mortgage payment is often considered a forced savings account that helps homeowners build a net worth about 40 times higher than that of a renter.” Along with these wealth gains, homeowners also saw their debt drop by 21% over the last decade, the report shows.

(According to the Pew Research Center, about 36 percent of American households rented, rather than owned, their homes in 2019, the last year that reliable data was available from the Census Bureau.) Moody's first started tracking the metric in 1999, when the typical rent-to-income ratio was 22.5 percent.

The number of U.S. households renting homes has been gradually increasing for the past 10 years, reaching 43.95 million in 2021, a 2.3% increase over a year prior. In the ten years, the annual number of homes rented in the U.S. grew by 10.3%.

A recent study from apartment search website and research blog RentCafe reveals that the generation transitioned from renter to owner, with 52% of millennials, born between 1981 and 1996, owning a home in 2022.

The number of millionaire renters has tripled in the past five years. More and more millionaires are stepping on the everyman's corner and renting apartments rather than putting down roots and money to become homeowners.

The Average Landlord Has Three Properties

Only 30% of landlords own properties worth $400,000 or more, with 7% at the top owning properties worth $1 million or more.

Homeowner vs.

In the under-35 age group, 65% of American households are rented. Meanwhile, in the 65+ age group (senior citizens), 79.3% own a home. The median age of homebuyers is 47 years old, while the median age of renters is 38 years old. A whopping 64% of millennials who own homes regret their purchase of a home.

65.8% of the U.S. population lives in a home they own, and 34.2% rent.

After California comes New York at 1.7 million and Pennsylvania at 1.5 million. Yet no-mortgage owners in California are only 33% of all homeowners – and only four places have a smaller share: D.C. at 24%, Maryland at 28% and Colorado and Utah at 30%.

Which state has the most renters? ›

California had the most renting households with 5.73 million, or 13.6 percent of the nation's 42 million rental homes. Tenants in California make up 44 percent of households in the state, the third-largest share of renters behind. D.C., at 58 percent, and New York at 45 percent.

The average monthly rent for all apartment types in the United States rose substantially in 2021. As of February 2023, the average monthly rent for a two-bedroom apartment in the United States reached 1,320 U.S. dollars, up from 1,282 U.S. dollars a year before.

Many residents in Northeast states are renters. The company IPX1031 found in a recent report that the highest percentage of renters in the U.S. can be found on the East Coast.

Less Expensive

LA property values have gone up for 12 consecutive years, and homeowners have an ever-increasing tax bill on their hands. These rising costs are part of the reason the majority of people living in LA are renters.

One of the benefits of renting a home is that there are no maintenance costs or repair bills. This means that when you rent a property, your landlord assumes full responsibility for all maintenance, improvement, and repairs.

Key Takeaways. Millennials are not buying homes as readily as the previous generation. Delaying marriage and having children is keeping many Millennials at home with their parents. Tighter lending criteria can also make homeownership unaffordable or virtually impossible for those without much credit history.

Buying a house gives you ownership, privacy and home equity, but the expensive repairs, taxes, interest and insurance can really get you. Renting a home or apartment is lower maintenance and gives you more flexibility to move. But you may have to deal with rent increases, loud neighbors or a grumpy landlord.

How long are you planning to settle down? If you're only going to live in a place for only a year or two, renting makes more sense. However, if you're going to stay there for three years or more, then buying would be a good idea and it becomes a better idea the longer you stay.

Federal tax benefits

Because of the many tax benefits, real estate investors often end up paying less taxes overall even as they are bringing in more income. This is why many millionaires invest in real estate. Not only does it make you money, but it allows you to keep a lot more of the money you make.

“90% of all millionaires become so through owning real estate.” This famous quote from Andrew Carnegie, one of the wealthiest entrepreneurs of all time, is just as relevant today as it was more than a century ago. Some of the most successful entrepreneurs in the world have built their wealth through real estate.

How much profit do most landlords make? ›

The amount will depend on your specific situation, but a good rule of thumb is to aim for at least 10% profit after all expenses and taxes. While 10% is a good target, you may be able to make more depending on the property and the rental market.

One big disparity among renters is race and ethnicity. Nationwide, about 58% of households headed by Black or African American adults rent their homes, as do nearly 52% of Hispanic- or Latino-led households, according to Pew Research Center's analysis of census data.

John Malone is the largest private landowner in the United States. Malone made his fortune as a media tycoon, building the company Tele-Communications, Inc, or TCI, and acting as its CEO before selling it to AT&T for $50 billion in 1999.

So, how long does a Tenant stay? A quick google search will tell you that for a single-family rental in the United States, you should expect an average tenancy to last about 3 years.

Top Home Ownership Statistics In America: 65.8% of Americans own a home as of 2022. Some 74 million Americans, or about 27%, live in a condo or HOA property.

In fact, the average person will own at least three houses in their lifetime. Living in one place for most of your life may or may not be your goal, but if it is, there are things you must do as a homeowner to ensure your home lasts as long as you'd like it to.

It is commonly agreed that allocating between 25 and 40 percent of your net worth to real estate ( including your home) allows you to capitalize on the advantages of real estate ownership while giving you plenty of flexibility to pursue other avenues of investment and wealth development.

In fact, O'Leary insists that it's a good idea to be debt-free by age 45 -- and that includes having your mortgage paid off. Of course, it's one thing to shed a credit card balance by age 45. But many people don't first buy a home until they reach their 30s.

Paying off your mortgage early can save you a lot of money in the long run. Even a small extra monthly payment can allow you to own your home sooner. Make sure you have an emergency fund before you put your money toward your loan.

What age do most people pay off their mortgage? ›

While the average age borrowers expect to pay off their mortgage is 59, the number of survey participants who have no idea when they will pay it off at all stood at 16%. In 2019, 9% of those asked didn't know and in 2020, 11% gave this answer.

The most expensive rental market in the US remains to be New York. The average monthly rent for a one-bedroom is roughly $3,260. This is about a $500 decrease from 2021, however as demand continues to increase prices are likely to follow.

North Dakota, South Dakota and Iowa are the best states for renters. California, Massachusetts and Nevada are the worst states for renters. Overall median rent ranges from $1,774 to $770 per month in Hawaii and West Virginia, respectively.

While the most expensive rentals are unsurprisingly in New York City, several California cities are not far behind.

The short answer is, yes. You can negotiate your rent. When you're renting an apartment, the price you pay isn't set in stone. But before you even consider negotiating, you need to make sure you know why you're asking for a discount.

Why is rent so high in the US right now? Over the past two years, the U.S. median rent rose by 18%. That was mostly because a competitive housing market and higher mortgage rates shut many people out of home buying. A strong jobs market and shortage of inventory also contributed to rising rent.

The highest percentage of renters in the U.S. can be found on the East Coast. Newark, New Jersey ranks number one with 79.15%.

More than 5 million households still behind on rent — what to do if yours is among them. As of February, renters in the U.S. continued to owe nearly $11 billion in debt. The average arrears is more than $2,000. Here are some of your options if you're in the red.

What is the main reason to avoid renting to own? ›

A major disadvantage of renting to own is that renters lose their down payment and other non-refundable charges if they decide not to purchase the home. Some sellers may even take advantage of renters by making it difficult or unappealing to purchase the home — with the goal of keeping the down payment.

By the numbers: The number of millennial homeowners increased by 7.1 million between 2017 and 2022 to 18.2 million, a 64% increase. There are still 17.2 million millennial renters, which is still considered the dominant renter generation, RentCafe found.

77% of the people in the US prefer to rent instead of buying a home. The average gross rent was $1,164 in 2019. Rent prices nationwide increased by almost 50% from 2007 to 2017.

"While a majority of the respondents intend to purchase a house, we should not discount the remaining cohort looking for rental accommodation – 40% of Gen Z would prefer to rent rather than purchase.

Homeowners appear to be slightly happier than tenants. But as the research suggests, this is likely because homeowners are wealthier than tenants. It may be the wealth that makes them happier, not that they own property.

Despite current conditions, Generation Z remains determined to become homeowners, according to a recent Rocket Mortgage® survey. In fact, 71.5% of Gen Zers plan to buy their first home in the next 1-6 years, while 37.2% plan on buying as soon as 1 – 3 years.

71% of millennials can afford less than half of the homes on the market⁵. Utah has the highest share of millennial homeowners at 59%, while California has the lowest share at 30%¹¹.

Stick to the 28/36 Rule

No matter how you finance your home purchase, most experts agree that people should not spend more than 28% of their gross income on housing expenses, and no more than 36% on debt. For example, if you earn $5,000 each month, your ideal mortgage payment should be no more than $1,400 per month.

“90% of all millionaires become so through owning real estate.” This famous quote from Andrew Carnegie, one of the wealthiest entrepreneurs of all time, is just as relevant today as it was more than a century ago.

Is owning more expensive than renting? ›

The overall cost of homeownership tends to be higher than renting even if your mortgage payment is lower than the rent. Here are some expenses you'll be spending money on as a homeowner that you generally do not have to pay as a renter: Property taxes. Trash pickup (some landlords require renters to pay this)

The U.S. Census Bureau calculates housing cost ratios for all renter-occupied units that pay cash rent and have positive household income. In 2021, 20.1 million renter-occupied households met the over 30% income threshold and were cost burdened, an increase of about 1 million households since 2019.

It is commonly agreed that allocating between 25 and 40 percent of your net worth to real estate ( including your home) allows you to capitalize on the advantages of real estate ownership while giving you plenty of flexibility to pursue other avenues of investment and wealth development.

Choose the right career

And one crucial detail to note: Millionaire status doesn't equal a sky-high salary. “Only 31% averaged $100,000 a year over the course of their career,” the study found, “and one-third never made six figures in any single working year of their career.”

The world's richest people owned on average about four homes in 2022.

The overwhelming majority of millionaires own real estate, making it by far the most popular alternative asset class. That includes their own home, second homes, investment properties, and fractional ownership of investment properties through partners or programs like Arrived Homes and Roofstock One.

Buying a house gives you ownership, privacy and home equity, but the expensive repairs, taxes, interest and insurance can really get you. Renting a home or apartment is lower maintenance and gives you more flexibility to move. But you may have to deal with rent increases, loud neighbors or a grumpy landlord.

As a renter, you don't build equity over the long term and if you leave, you don't get to take any profits with you. Owning a home can be empowering and emotionally rewarding. The money you spend on your mortgage every month and improving your home yields a long-term investment benefit for you instead of a landlord.

The top 1% represents about 1.3 million households who roughly make more than $500,000 a year -- out of a total of almost 130 million. The concentration of wealth in the hands of a fraction of the population is at the core of some of the country's major political battles.

What is the average rent in the U.S.? The average rent for an apartment in the U.S. is $1,702. The cost of rent varies depending on several factors, including location, size, and quality.

What is the rule of thumb for rent? ›

A popular standard for budgeting rent is to follow the 30% rule, where you spend a maximum of 30% of your monthly income before taxes (your gross income) on your rent. This has been a rule of thumb since 1981, when the government found that people who spent over 30% of their income on housing were "cost-burdened."

A high-net-worth individual is a person with at least $1 million in liquid financial assets.

You might need $5 million to $10 million to qualify as having a very high net worth while it may take $30 million or more to be considered ultra-high net worth. That's how financial advisors typically view wealth.