Rent or Buy? Jersey’s Baby Boomers Seeking Less Responsibility, Pressure
Millennials may be known as the "renter generation," but they're apparently not the only group that's showing increased interest in the rental market.
Instead of putting money down on a smaller house when they've outgrown their current living quarters, more Baby Boomers are keeping their options open and examining the benefits of living in a rental unit, figures suggest.
According to data from ApartmentList.com, the population of Baby Boomer renters increased by 34 percent from 2007 to 2008. The trend was recognized as one of the drivers of a 4.3 million increase in the number of renter households in the U.S. from 2005 to 2015.
But cost, at least in New Jersey, is unlikely the main appeal for older home-hunters.
In an analysis of monthly costs by GoBankingRates.com, New Jersey was included on a long list of states in which it's cheaper to rent a home than purchase one.
Many Boomers are moving in the direction of renting just to "give themselves a break," according to Amber Noble Garland with Keller Williams Realty West Monmouth.
"I believe that renting is just an option for them that alleviates the pressure and allows them to breathe for a little bit," Noble Garland said. "The thought of renting, psychologically, is a reprieve for them."
Renters, for example, have fewer worries about maintenance outside their walls. And, depending on the unit's size, Boomers may be able to get all the luxury they want in a smaller space and with fewer stairs.
New Jersey has certainly been responding to the demand for rentals among the younger and older generations. Of the 2,248 building permits obtained in June, nearly 63 percent involved multifamily dwellings. Through June, multifamily approvals accounted for almost two-third of this year's building permit activity, according to data compiled by the U.S. Census Bureau.
When weighing the perceived benefits of renting, Noble Garland said she advises her clients to think of their financial future, rather than only the present. Owning a home is valued exponentially more in the long run.
"If you rent, you are helping to make a landlord rich and wealthy. You'll never get that money back," she said. "If you are still a homeowner, you are going to build equity and you're going to leave something to your children and your grandchildren."