In 1965, Lyndon Johnson was president, the war in Vietnam was escalating, the space race was in full swing, the Rolling Stones were on a world tour and the St. Louis Arch was completed.
According to a report from the Pew Research Center based on data from the U.S. Census Bureau, 36.6 percent of household heads rented their home in 2016, close to the 1965 number of 37 percent.
CNBC reported that key drivers to this trend include rising home prices, lingering fears from the housing crash, and larger amounts of student debt, according to Richard Fry, a senior researcher at Pew and one of the report’s authors.
“There is some evidence that increased student debt has made it more difficult for households headed by young adults to become homeowners.”
Moreover, millennials are still the most likely of all age groups to rent, according to the study. In 2016, 65 percent of households headed by young adults were renting. That figure is up 8 percentage points from a decade ago.
A recent Trulia survey noted that renters may not be making the best choice. Trulia Managing Editor David Weidner said the survey found that renters’ top regret was wishing they had bought instead of renting (41 percent).
“One thing our research has found is that people can sometimes be a little too cautious. In every U.S. major market, it’s cheaper to buy a home than it is to rent over seven years. And it’s really not even close.”
One reason so many people are renting: Just 45 percent of renters on average can afford the payments on a median-priced home in their area, according to a report on the state of housing from Harvard University’s Joint Center for Housing Studies. Buying a house is even more out of reach for renters in expensive markets such as the West Coast, the Northeast and Florida.
The study also found that college graduates are the least likely group to be renters. In 2016, 29 percent of college-educated household heads were renters, compared with 38 percent of household heads with a high school degree only or some college experience and 52 percent of household heads who did not finish high school.
As rental trends are reaching 1965 levels, the St. Louis Arch remains a landmark and the Rolling Stones are still on the concert circuit. For real estate agents, today’s rental trend could be tomorrow’s opportunity. According to the Pew survey, 72 percent of renters said they would like to buy a house at some point.