Households in Transition Make Decision to Rent Submitted by Jerry Cohen on Thu, 02/04/2010 - 14:25 Life transitions are causing many people to choose renting over home ownership. In fact, many former home owners have chosen rental over ownership. Let’s look at some of the factors that have people flocking to home rental.

Loss of Employment
At the beginning of the current recession, in December of 2007, the unemployment rate was at a manageable 5%. Since that time unemployment has increased drastically. As of December of 2009, the unemployment rate in the U.S. has risen to 10%.As people lose their jobs, they find it more and more difficult to sustain home ownership. Often unemployed people can find a way to buy some time. They supplement their unemployment benefits with money from their savings accounts to make payments and repairs on their home. However, this situation can only last so long before they are forced to look at other alternatives.One alternative people are seeking is renting over home ownership. Renters can keep their regular payments at or below their former mortgage payments while avoiding major expenses like furnace replacement or roof repairs. This is very appealing to unemployed couples who are struggling to keep up with the bills.

Change in Marital Status
Fifty percent of 1st marriages in the United States end in divorce. The numbers get even higher for people who give marriage another shot. Sixty-seven percent of second marriages end in divorce and 74% of third marriages end in divorce.Each time a couple goes through a divorce it makes continued home ownership that much more difficult. Often, these divorced couples end up liquidating their home and splitting the proceeds from the sale. Half the proceeds are rarely enough for a down payment on a new home and living off one income or alimony is often not enough to cover mortgage payments and repairs.These newly single individuals turn to rental housing as, at the very least, a stop-gap measure for their housing needs.

Aging
You might be surprised to discover over 4.1 million households in the United States, with household heads at or over the age of 65, rent their home. Home rental is a logical choice for many seniors. As we age, our bodies become less able to deal with repairs or even accomplish tasks such as shoveling and lawn care that are a consistent part of home ownership. Renting often means that someone else will take care of the lawn, shovel the snow, clean the gutters, etc.This simplifies not only financial obligations for seniors, but also home care in general.

Benefitting From Changes in Housing
The rental market is changing at a rapid pace, and it has created some great opportunities for investors who are willing to get in front of the rising rental wave and ride it.

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