Why Two-Thirds of New Yorkers Rent, Not Buy

New Yorkers constantly wrestle with the decision between continuing to rent an apartment or taking the plunge to buy a home. According to StreetEasy’s latest survey, 66 percent of renters plan to rent rather than buy their next apartment, and nearly 1 in 5 (17 percent) of these renters think that buying isn’t a wise investment.

To better understand the choice between renting and buying, and the drivers behind these decisions, StreetEasy surveyed 2,550 New Yorkers across all five boroughs about their experiences in the city, their home and community priorities, and their struggles.

For Many, Renting in NYC Is a Lifestyle Choice, Not Intermediate Step

New York is a city of renters. Only 32 percent of city residents own homes. Of all the renters we surveyed who signed a new lease within the past 12 months, 57 percent of millennials and 34 percent of Generation X renters (or 52 percent of all surveyed) say they had never considered buying during their moving process.

Of the two-thirds of the city residents who rent, 66 percent plan to continue renting rather than buy their next home. Among New Yorkers who plan to move within the next year, 66 percent of millennial renters (ages 18 to 38) and 80 percent of Generation Xers (ages 39 to 53) plan to rent rather than buy. When looking at younger millennials, those between the ages of 18 and 29, 81 percent plan to continue renting.

They cite financial and non-financial reasons for this. Among millennials, the top three reasons for renting are that they cannot afford to purchase in their desired neighborhood (33 percent), want to be able to move easily as life changes (31 percent), and do not want to be tied to a mortgage (28 percent).

Among Generation X renters (ages 39 to 53), the predominant reason for renting is that they do not think buying a home is a good investment. Forty percent of Generation X renters say this, even though 78 percent say they can afford to purchase in their desired neighborhood.

Thus, for some New Yorkers, renting is about affordability — an option that seems financially more wise than buying. For others, renting is a lifestyle choice, and not simply a way to find shelter until they can afford to buy.

Many Want to Buy for Emotional Reasons, Not Return on Investment

New York City is currently a buyer’s market, which means that 1 in 3 renters who plan to buy their next home have more options to choose from and more opportunity to negotiate. In the current market, home prices are falling, and price cuts have increased to record levels in part because new for-sale inventory has skyrocketed.

Among renters who aspire to buy their next home, only 1 in 4 state that they can currently afford to buy, and most have other reasons for desiring homeownership. The most commonly cited reasons are related to the emotional gratification that comes with owning a home: 56 percent responded that they want “to have a home, not just a place to live,” and 25 percent want “to realize the ‘American Dream.’” These responses suggest that even New Yorkers, who live in a city where renting and apartment dwelling is common, associate homeownership with a greater sense of belonging and a national ideal.

How We Did It

StreetEasy partnered with independent market research firm YouGov to conduct a representative survey that was fielded online in May and June 2018. The survey gathered information from 2,550 residents in all five boroughs. Data was collected through a general market sampling of recent renters, who rented in the past 12 months; inactive renters, who are currently renting and did not move in the past 12 months; buyers and sellers who completed a transaction in NYC in the past 12 months; and homeowners who currently own and did not move in the past 12 months. Quotas based on the U.S. Census were set for age, gender, and education. The data was then weighted to known U.S. Census estimates on age, gender, race and education, to ensure that respondents were representative of the New York City population. The results then underwent substantial internal analysis and review by researchers and economists at Zillow Group and StreetEasy.
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