The 'New American Dream' may not include home ownership, study finds

Entrata, a Lehi-based AI-enabled multifamily industry operating system, has released its “The New American Dream report,” which found that the American Dream is changing as more people are renting by choice and not because they can’t afford to own a home. In fact, one in five (20 percent) expect to be lifelong renters, an increase of 33 percent from 2021 (15 percent). This further highlights a clear evolution in consumer psychology as home ownership is no longer perceived as the only path to obtaining the American Dream, report authors said.

“Today’s apartment residents are reshaping the traditional American Dream to fit what’s most important to them, including flexibility, prime amenities offered in their communities and the ability to live life on their terms,” said Adam Edmunds, CEO of Entrata. “Many renters no longer see the need to be tied to a home and a mortgage when apartment communities provide everything they need. Experiences seem to be at the core of the new American Dream and renters are making the most of them.”

The New American Dream

For many apartment residents today, not all roads to the American Dream lead to homeownership. Instead, they’re increasingly expecting to rent for the long haul as they invest in other areas to build their quality of life. Emphasizing this further, the report found that 41 percent of renters say their American Dream has nothing to do with homeownership.

This is in large part because renting offers flexibility and freedom that fits their lifestyle and finances. Highlighting this further, 66 percent of renters say renting fits their current lifestyle more than owning a home and 23 percent of renters like the location flexibility renting gives them.

Renting: It’s Not Just About the Money

The outdated notion that renters are either too young or financially unable to buy a house is a thing of the past. Today’s renters are well-established and confident in their professional position. As a matter of fact, one in three renters (33 percent) say they could afford a home that meets their needs in 2024, and a quarter (25 percent) of renters with a strong credit score (above 750) never want to stop renting. Renting also offers flexibility and freedom that fits their lifestyle and finances:

• 66 percent of renters say renting fits their current lifestyle more than owning a home.
• 23 percent of renters like the location flexibility renting gives them and 17 percent like the financial flexibility of not being tied to a mortgage.

Entrata found that 46 percent of renters have the financial means to pursue their hobbies and 65 percent are happy with the direction of their career, with 73 percent seeing a path to pursue their career goals. Additionally, more than a third (35 percent) say being a renter gives them more career opportunities than being a homeowner. A majority of renters (63 percent) even feel they have a similar or better quality of life than their parents at a similar age.

With credit card debt skyrocketing and rainy-day funds plummeting, renters are prioritizing other financial goals over saving for a home:

• 56 percent of renters say they’re prioritizing paying off debts right now rather than saving and 43 percent prefer to have their savings in investments and retirement strategies that are easy to liquidate rather than real estate.
• More than a third (36 percent) of renters prefer to invest in retirement than save for a home.
• Nearly three-quarters of renters (74 percent) are spending their discretionary money on experiences like dining, international travel and entertainment (e.g. concerts, sporting events, etc.).

A Strong Community

Undeterred by the lack of a traditional back yard, renters are proud of where they’ve chosen to live and are choosing to make it their home by hosting social gatherings with neighbors, friends and family by leveraging dedicated common areas that their apartment community provides them. Entrata found that:

• 40 percent of renters have been able to use communal spaces of their apartment community for social gatherings.
• More than a third (34 percent) of renters have their friends or family over at least once a month.
• 29 percent of renters said they’d be interested in spending time with friends in community spaces at their apartment at least once a month.

The full Entrata report can be accessed at the company’s website, entrata.com.