8 in 10 baby boomer renters would rather rent than buy a house. Here's why.

By Aarthi Swaminathan

Boomers who rent value the flexibility and the mental freedom of renting rather than owning, survey finds

Renting is cheaper than owning in America's biggest cities - and baby boomers are loving it. Baby boomers who rent their home would rather be renting than owning, according to a new survey by Bank of America (BAC).

Aspiring home buyers generally feel downbeat about their prospects of owning a home. With home prices marching upwards as mortgage rates stay over 7%, 37% of the 2,000 people surveyed said that renting is the "better choice" than buying, even though they plan to buy a house in the near future.

Baby boomers, the generation born between 1946 and 1964 - who are now in their 60s to late 70s - are leaning more towards renting for now: 84% who rent said they prefer to do so in the current environment, up from 63% a year ago.

The typical age for first-time home buyers is 35, according to a November 2023 report by the National Association of Realtors. The typical age for repeat home buyers is 58.

The vast majority of boomers, 90%, attributed their desire to rent to the freedom that renting gives them from property maintenance and repair work.

A similar share, 87%, also wanted to rent to avoid the financial responsibilities and stresses associated with homeownership. Across the nation, home-insurance costs are surging, due in part to the increased incidence of natural disasters damaging properties.

And 83% of boomers surveyed said they valued the sense of freedom to move when and where they want to, which they could not do if they owned a home.

The high cost of homeownership in today's climate also plays a role in people's decision-making. Home prices have hit an all-time high, and the typical home sold for $384,721 as of May 5, according to real-estate brokerage Redfin (RDFN). The average rate on the 30-year mortgage was 7.11% as of Tuesday, according to Mortgage News Daily. That's in stark contrast to the average 30-year rate during the same period in 2020, which was 3.19%.

Consequently, many aspiring homeowners feel shut out of the current housing market. Home-buying sentiment is at a record low, with 76% of Americans saying it's a bad time to buy a house, according to polling firm Gallup.

And most Americans expect mortgage rates to go up even further, potentially reaching 9.7% in the next three years, according to a recent survey by the New York Fed.

To be sure, 66% of renters surveyed said they feel like they are losing their out on the financial and emotional benefits of homeownership.

And 76% said they were planning to purchase a property within the next five years.

Challenges with finding rental housing as people age

But finding rental housing that can accommodate needs as boomers age is a challenge, MarketWatch has reported previously.

"Our housing stock and our needs aren't matching," one expert told MarketWatch. "We have such an aging country and we should just lean into this but we're not."

Just under one in five households in the U.S. include an individual with a mobility-related disability, who has difficulty accessing and using spaces in their homes, or uses a device to assist with their mobility. However, less than 4% of homes offer the key features of accessible housing.

That includes features such as single-floor living, no-step entries, and wide hallways and doorways, according to Harvard University's Joint Center for Housing Studies' analysis of 2011 survey data.

Boomers versus other generations on homeownership

To be sure, baby boomers are one of the more dominant generations when it comes to home buying. About 31% of home buyers are boomers, who are only outpaced by millennials, who make up 38% of buyers.

As for the boomers who already own homes, many are not planning to go anywhere. A recent survey by Redfin found that 51% of baby boomers aren't planning to sell their homes anytime soon, and 27% said they've completely or almost fully paid off their homes.

If and when these boomers age out of their homes, or choose to sell their homes and rent instead, the generation poised to benefit the most from the homes hitting the market will be Gen Z.

Jessica Hall contributed.

-Aarthi Swaminathan

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05-15-24 1124ET

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