A new survey commissioned by the National Apartment Association (NAA) further dispels the notion that the American Dream includes a single-family home with a white picket fence.
The independent survey of more than 2,000 U.S. adults, conducted by leading market research firm Harris Interactive, finds that 76 percent of consumers deem renting to be the more favorable option to owning a home in the current real estate market—a 5 percent increase from the last time the survey was conducted in 2008. Why the desire to rent? A majority of respondents, 64 percent, cited having no responsibility for major repairs or maintenance as the primary reason, followed by 50 percent who cited financial reasons such as not being impacted by an unpredictable real estate market and not being susceptible to foreclosure.
The survey also found that both renters and homeowners are not eager to make any changes in their housing status within the next year. Sixty percent of renters plan to continue renting their current residence or rent new residences within the next year; 12 percent of renters said they have plans to buy a new home this year; and only 14 percent believe that buying a house is preferable to renting given the current state of the market.
Doug Culkin, president of the Arlington, Va.-based NAA, sat down with Multifamily Executive managing editor Rachel Z. Azoff to give us an insider’s look at the survey’s key findings.
MFE: What are the main discoveries NAA gleaned from the study?
CULKIN: The biggest one is that overall confidence in the housing market remains low and certainly with the economy the way it is right now, there is a lot of uncertainty out there. The message is that in this economy, most of the people, including homeowners, say renting is definitely providing consumers with more options. Certainly with what has happened in the economy—with unemployment at the highs it has been and the meltdown of the subprime mortgage market—if you do lose your job and you have to relocate to find a new position, then you have a lot more options available to you if you are renting than if you own a home.
MFE: Are the findings of the study consistent with what your members are seeing?
CULKIN: Yes. A number of economists have tried to say the crisis is over, but people are still very nervous and are very aware of what is happening in the economy. I think part of the reason why we are seeing good results in multifamily is because there hasn’t been any new development in the past two years. Our occupancy rates across the country, which are at 95 percent to 96 percent, are phenomenal in this type of an economy. But there is still uncertainly for consumers.
MFE: How do the results of the survey compare to the survey last conducted, in 2008?
CULKIN: The numbers are higher from two years ago and certainly higher than the first time we did the survey [in 2006], and I think it’s perfectly reasonable to assume that what happened in the economy is a huge contributor to the unease that consumers are feeling right now. All of our findings are up from what they were two years ago. Seventy-six percent of respondents felt that there were advantages to renting versus owning—that was an increase of 5 percentage points from 2008. The uncertainty of the economy and the uncertainty of the labor market are putting people at odds. Most people are not planning on going anywhere for the next year. They have determined that they will stick it out and not take a chance until they see things stabilize.
MFE: Do you have any predictions as to what the pulse of the consumer will be in 2012, the next time the survey is conducted?
CULKIN:A lot of prognosticators for the industry are saying that in 2011 we should start to see the rebound with very strong improvement across the board in 2012 and 2013. I hope that is true. I would expect that if the people who make predictions for the industry are correct, in the 2012 survey, you will see the percentages will have dropped.