Not quite the American dream: Renting is becoming a better deal, even if you're wealthy or a retiree
"Renting today isn't just for young adults starting out," said Nadia Evangelou, a senior economist for the National Association of Realtors. "It's actually a much more mixed picture. Over the past decade, we have seen more older millennials and Gen Xers staying in rentals longer, and even some boomers, for example, opting to rent later in life."
The overall number of renters has grown over the last several years. There were 45.6 million renter-occupied housing units in the US in 2023, up from 39.7 million in 2010, based on the Census Bureau's American Community Survey.
Are you renting a home longer than you thought you would, or have you become a renter again later in life? Share your experience with these reporters at erelman@businessinsider.com and mhoff@businessinsider.com.
The US is also seeing an uptick in older tenants. An Urban Institute projection found that the share of people 65 and older who rent their homes will grow from 22% in 2020 to 27% in 2040 — an additional 5.5 million renting households. Older Black renters will see the biggest jump, doubling in number between 2020 and 2040.
A smaller share of US renter-occupied housing units were headed by people under 35 years old in 2023 than in 2010. Meanwhile, the share of rental households headed by someone 65 or older grew over that period.
Renters are staying in their homes longer as well, per a Redfin analysis of Census Bureau data.
"Renting is becoming less of a short-term stop and more of a long-term reality for many households," Evangelou said.
Renting could be a smart financial move
The main reason people are renting for longer: the surging cost of homeownership. Home prices have soared across the country amid a housing shortage. At the same time, property taxes, home insurance, and home repair and maintenance costs are on the rise.
All of that has made renting a better deal than buying in many places — a reversal of the historic norm. Indeed, homebuyers purchasing starter homes in 50 major cities in 2024 spent over $1,000 more on housing costs each month than tenants do.
To be sure, many renters are struggling, too. Tenants' incomes aren't keeping up with rising housing costs, and a rising share of renters are cost-burdened, meaning they spend more than 30% of their income on housing.
Some Americans are renting for longer by choice. Rich renters are on the rise. Many millionaire millennials and boomers with healthy savings, who could afford to buy a home, are opting instead to rent. They like the flexibility of a lease, the convenience of having a landlord handle home maintenance, and the amenities luxury rentals offer, like in-building doggy day care, dry cleaning, and yoga classes.
"I think of renting as paying for a service, and liken it to a hotel," start-up founder Tori Dunlap, a 30-year-old multimillionaire, told BI last year. "Renting is flexible, and I don't have to worry about things that homeowners worry about, like committing to a particular place or neighborhood or dealing with a burst pipe."
Some of these affluent renters opt instead to keep their money in the market or other more flexible, higher-return investments.
"People are reevaluating whether or not they want their homes to be their asset wealth-builder," Doug Ressler, an analyst at Yardi Matrix, part of the property-management software firm Yardi, said. He added that higher-income tenants "want to have the freedom and mobility of time, and they don't want to be saddled with the things that a house brings with it."
Some financial advisors are also challenging the conventional wisdom that buying a home is a smarter financial decision than renting.
"You've been lied to about buying property," Ramit Sethi, a popular financial advisor and star of the Netflix show "How to get rich," said in a 2023 video titled "Why I Don't Own a House as a Multi-Millionaire."
Sethi recommends that those who buy a home take into account the "phantom" costs of maintenance, repairs, insurance, and buying and selling fees, and urges them to maintain diverse investments.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
USA Today
17 minutes ago
- USA Today
Will the Fed cut rates today? Probably not, but here's when they might
The Federal Reserve is expected to hold interest rates steady Wednesday between 4.25% and 4.5% – exactly as interest-rate traders' bets had predicted after the policy-making body's meeting in June. The traders' bets now predict there's good chance the Fed will lower interest rates at its meeting on Sept. 17. That means Americans won't see short-term interest rates – which are heavily influenced by the Fed's decisions – decline for several weeks. Ahead the Fed's announcement, two-thirds of interest-rate traders are betting the Fed will cut its interest rate in September, according to the CME FedWatch tool. The FedWatch tool tracks the likelihood that the Fed will change the federal funds rate based on futures prices. U.S. economy: Here's where the economy stands as the Fed makes its interest rate decision Will the Fed lower interest rates? Not likely Unable to view our graphics? Click here to see them. Will interest rates drop in 2025? President Donald Trump's tariff proposals have put the Fed in a difficult position: Inflation stemming from the COVID-19 pandemic has moderated, but consumer prices may be on the rise. Inflation ticked up slightly in May and June – when it rose to a 2.7% annual rate. Analysts suggest lower energy prices are helping to minimize the impact of tariffs. How much tariffs will raise prices in the coming months remains uncertain, as many details remain unresolved. If the Federal Reserve lowers interest rates before it's clear how tariffs are affecting the prices we pay, it could unintentionally trigger inflation − by encouraging more borrowing to pay for goods made more expensive by those tariffs. The Fed tries to hold inflation steady at about 2% each year while keeping as many Americans employed as possible. The June jobs report showed unemployment ticked down slightly to 4.1% and the economy added 147,000 jobs. The Bureau of Labor Statistic will give us the next look at U.S. employment on Friday morning. Current unemployment rate Though other indicators also suggest the economy remains relatively strong, Powell cautioned after the May meeting that recent inflation and employment data could be indicators of early signs of concern. But he said the uncertainty surrounding tariffs and their impact on the economy has led them to keep interest rates unchanged. "I think there's a great deal of uncertainty about, for example, where tariff policies are going to settle out," Powell said. "When they do settle out, what will be the implications for the economy for growth and for employment? I think it's too early to know that."
29 minutes ago
Medicaid was signed into law 60 years ago. Trump's big bill is chiseling it back
WASHINGTON -- On this day in 1965, President Lyndon B. Johnson signed legislation into law that launched Medicaid, creating a U.S. health care safety net for millions of low-income Americans in what would become one of the crowning achievements of his domestic legacy. A year earlier, he did the same for food stamps, drawing on President John F. Kennedy's first executive order for the development of 'a positive food and nutrition program for all Americans.' This summer, with the stroke of a pen, President Donald Trump began to chisel them back. The Republican Party's big tax and spending bill delivered not just $4.5 trillion in tax breaks for Americans but some of the most substantial changes to the landmark safety net programs in their history. The trade-off will cut more than $1 trillion over a decade from federal health care and food assistance, largely by imposing work requirements on those receiving aid and by shifting certain federal costs onto the states. While Republicans in Congress argue the trims are needed to rightsize the federal programs that have grown over the decades and to prevent rising federal deficits, they are also moving toward a long-sought GOP goal of shrinking the federal government and the services it provides. 'We're making the first changes to the welfare state in generations,' House Speaker Mike Johnson said in a recent podcast interview. As the tax breaks and spending cuts law begins to take shape, it is unleashing a new era of uncertainty for the safety net programs that millions of people in communities across the nation have grown to depend on, with political ramifications to come. Polling shows most U.S. adults don't think the government is overspending on the programs. Americans broadly support increasing or maintaining existing levels of funding for popular safety net programs, including Social Security and Medicare, according to the poll from The Associated Press-NORC Center for Public Affairs Research. Local governments are scrambling to figure out how they will comply with the new landscape, calculating whether they will need to raise their own taxes to cover costs, trim budgets elsewhere or cut back the aid provided to Americans. 'The cuts are really big, they are really broad and they are deeply damaging,' said Sharon Parrott, president of the Center for Budget and Policy Priorities, a research institute in Washington. 'The consequences are millions of people losing health care coverage,' she said. 'Millions of people losing food assistance. And the net result of that is higher poverty, more hardship.' At the same time, certain people who receive aid, including parents of teenagers and older Americans up to age 64, will have to prepare to work, engage in classes or do community service for 80 hours a month to meet new requirements. All told, the nonpartisan Congressional Budget Office estimates 10 million more people will end up without health insurance. Some 3 million fewer people will participate in the Supplemental Nutritional Assistance Program, known as SNAP. 'People are really concerned what this means for their fiscal health,' said Mark Ritacco, chief governmental affairs officer at the National Association of Counties, which held its annual conference the week after Trump signed the bill into law. The organization had pushed senators to delay the start dates for some Medicaid changes, and it hopes that further conversations with lawmakers in Congress can prevent some of them from ever taking hold. At its conference, questions swirled. 'We're talking about Medicaid and SNAP — these are people's lives and livelihoods,' Ritacco said. Republicans insist the law is adhering to Trump's vow not to touch Medicaid as the changes root out waste, fraud and abuse. A memo from the House GOP's campaign arm encourages lawmakers to focus on the popularity of its new work requirements and restrictions on benefits for certain immigrants. 'Those safety nets are meant for a small population of people — the elderly, disabled, young pregnant women who are single,' the House speaker said on 'The Benny Show.' He said the years since the Affordable Care Act, or Obamacare, came into law, 'everybody got on the wagon.' 'All these young, able-bodied, young men who don't have dependents, riding the wagon,' the speaker said. When President Johnson established Medicaid alongside Medicare — the health care program for seniors — as part of the Social Security Amendments of 1965, it was meant for low-income families as well as the disabled. And it quickly took off. Almost every state signed on to participate in Medicaid by 1970, according to the KFF, an organization focused on health policy. It soon went beyond covering its core population to include pregnant women, school-age children and not just the very poor but also those with incomes just over the federal poverty limit, which is now about $15,650 annually for a single person and $26,650 for a family of three. In the 15 years since the Affordable Care Act became law under President Barack Obama, Medicaid has grown substantially as most states opted to join the federal expansion. Some 80 million adults and children are covered. While the uninsured population has tumbled, the federal costs of providing Medicaid have also grown, to more than $880 billion a year. 'There are a lot of effects Medicaid has on health, but the most stark thing that it does is that it saves lives,' said Bruce D. Meyer, an economist and public policy professor at the University of Chicago who co-authored a pivotal study assessing the program. The law's changes will certainly save the federal government 'a substantial amount of money,' he said, but that will come at 'substantial increases in mortality. And you have to decide what you value more.' Food stamps, which had been offered toward the end of the Great Depression but were halted during World War II amid rationed supplies, launched as a federal program when Johnson signed the Food Stamp Act of 1964 into law. Today, SNAP provides almost $200 in monthly benefits per person to some 40 million recipients nationwide. Democratic Leader Hakeem Jeffries, who delivered the longest speech in House history while trying to stall the bill, said the changes will hurt households and communities nationwide. 'Who are these people?' Jeffries said. 'Ripping health care away from the American people. The largest cuts in Medicaid in American history. Ripping food out of the mouths of children, seniors and veterans who are going to go hungry as a result of this one big, ugly bill.'
Scientific American
an hour ago
- Scientific American
U.S. Nuclear Energy Plans Could Proliferate Weapons
Recent events in Iran demonstrate that dropping ' bunker buster ' bombs on nuclear plants is not an ideal, or even necessarily effective, way to prevent proliferation. It is far preferable to prevent the spread of nuclear-weapon-usable technologies in the first place. A simplistic way to achieve that might be to halt the worldwide growth of nuclear power. Public approval of nuclear energy, however, is actually growing in the U.S., and the White House recently announced policies to quadruple American nuclear power by 2050 while also promoting nuclear exports. This surge of support is somewhat surprising, considering that new reactors not only pose radiation risks from nuclear waste and potential accidents but also produce electricity that costs considerably more than solar or wind power (which can be similarly reliable when complemented by batteries). But nuclear power plants are touted for other attributes, including their small footprint, constant output, infrequent refueling, low carbon emissions and ability to produce heat for manufacturing. If customers decide this justifies the higher cost—and are willing to wait about a decade for new reactors—then nuclear energy has a future. That leaves only one other way to stop the spread of dangerous atomic technology – by prudently limiting nuclear energy to the 'bomb-resistant' type, which entirely avoids weapons-usable material by disposing of it as waste, rather than the 'bomb-prone' variety that creates proliferation risks by purifying and recycling nuclear explosives. On supporting science journalism If you're enjoying this article, consider supporting our award-winning journalism by subscribing. By purchasing a subscription you are helping to ensure the future of impactful stories about the discoveries and ideas shaping our world today. Regrettably, however, the White House recently directed government officials to facilitate the bomb-prone version in a set of executive orders in May. That decision needs to be reversed before it inadvertently triggers an arms race, atomic terrorism or even nuclear war. As Iran has highlighted, ostensibly peaceful nuclear technology can be misused for a weapons program. That is why, from now on, the U.S. should support only bomb-resistant reactors and nuclear fuel. Most Americans probably don't realize that nuclear reactors originally were invented not for electricity or research but to produce a new substance, plutonium, for nuclear weapons such as the one dropped on Nagasaki. Every nuclear reactor produces plutonium (or its equivalent), which can be extracted from the irradiated fuel to make bombs. This raises three crucial questions about the resulting plutonium: How much of it is produced? What is its quality? And will it be extracted from the irradiated fuel, making it potentially available for weapons? Bomb-resistant nuclear energy—the only type now deployed in the U.S.—produces less plutonium, which is of lower quality and does not need to be extracted from the irradiated fuel. By contrast, bomb-prone nuclear energy produces more plutonium, which is of higher quality and must be extracted to maintain the fuel cycle. Of course, a declared facility to extract plutonium in a country lacking nuclear weapons could be monitored, but history shows that international inspectors would stand little chance of detecting —let alone blocking—diversion for bombs. That is why the U.S. made bipartisan decisions in the 1970s to abandon bomb-prone nuclear energy, aiming to establish a responsible precedent for other countries. In light of today's growing concerns about nuclear weapons proliferation in East Asia, the Middle East and lately even Europe, one might assume that U.S. industry and government would promote only bomb-resistant nuclear energy—but that is not so. A growing number of venture capitalists and politicians are aggressively supporting technologies to commercialize plutonium fuel. They are doing so despite the security, safety and economic downsides that have doomed previous such efforts. These past failures are evidenced by the fact that of the more than 30 countries with nuclear energy today, including many which previously attempted or considered recycling plutonium, only one (France) still does so on a substantial scale—at considerable financial loss. However, if the U.S. government continues subsidizing nuclear technologies without regard to proliferation risk, then the plutonium entrepreneurs will keep hopping on that gravy train. Eventually, they even may find willing customers for their pricey, bomb-prone technology—but mainly among countries willing to pay a premium for a nuclear-weapon option. The most egregious proposal has come from start-up Oklo, a company originally spearheaded by venture capitalist Sam Altman (who stepped down as chairman in April). It is pursuing 'fast' reactors that can produce larger amounts of higher-quality plutonium, and it has declared the intention to extract plutonium for recycling into fresh fuel. Oklo even says it plans to export this proliferation-prone technology ' on a global scale.' The Biden administration and Congress, despite the obvious dangers of dispersing nuclear weapons-usable plutonium around the world, chose to subsidize the company as part of a wholesale push for new nuclear energy. Then the Trump administration picked as secretary of energy an industrialist named Chris Wright, who actually was on Oklo's board of directors until his confirmation. In 2024, Wright and his wife also made contributions to a fundraising committee for Trump's presidential campaign totaling about $458,000, along with contributions to the Republication National Committee of about $289,000. In the first quarter of 2025, Oklo increased its lobbying expenditures by 500 percent compared to the same period last year. Biden also gave nearly $2 billion to TerraPower, a nuclear energy venture founded by billionaire Bill Gates, for a similar but larger 'fast' reactor that also is touted for export. Experts say this inevitably would entail far greater plutonium extraction, even though the company denies any intention to do so. The U.S. Department of Energy also has funded the American branch of Terrestrial Energy, which seeks to build exotic 'molten salt' reactors that use liquid rather than solid nuclear fuel. Such fuel must be processed regularly, thereby complicating inspections and creating more opportunities to divert plutonium for bombs. Most baffling are proposals for large 'reprocessing' plants to extract huge amounts of plutonium from irradiated fuel without plausible justification. The company SHINE Technologies, with technical assistance from a firm named Orano, is planning a U.S. pilot plant to process 100 metric tons of spent fuel each year. This would result in the annual extraction of about a metric ton of plutonium—enough for 100 nuclear weapons. SHINE claims the plutonium is valuable to recycle as reactor fuel, but the U.K. recently decided to dispose as waste its entire 140-metric-ton stockpile of civilian plutonium because no one wanted it as fuel. The U.S. similarly has been working to dispose of at least 34 metric tons of undesired plutonium as waste. Officials from five previous U.S. presidential administrations, and other experts including me, protested in an April 2024 letter to then president Biden that SHINE's plan would increase 'risks of proliferation and nuclear terrorism.' Despite this, President Trump recently issued an executive order in May that directed U.S. officials to approve 'privately-funded nuclear fuel recycling, reprocessing, and reactor fuel fabrication technologies ... [for] commercial power reactors.' Even more troubling, a separate order directed the government to provide weapons-grade plutonium—retired from our arsenal—directly to private industry as 'fuel for advanced nuclear technologies,' which would jump-start bomb-prone nuclear energy before assessing the risks. SHINE and a similar company, Curio, claim their facilities would slash the country's radioactive waste stockpile. But realistically, they could barely dent its growth of 2,000 metric tons annually. They also propose to extract valuable radioactive isotopes for medical and space application, but these materials already are available elsewhere at less expense or are needed in such tiny amounts that they require processing only hundreds of kilograms of irradiated fuel annually, not the proposed hundreds of metric tons, which is a thousand times more. All of these companies also claim their plutonium extraction would utilize new technologies that are 'proliferation resistant' —but that, too, is bunk. As far back as 2009, six U.S. national laboratories concluded that, 'there is minimal additional proliferation resistance to be found by introducing ... [such] processing technologies when considering the potential for diversion, misuse, and breakout scenarios.' Fortunately, some advanced nuclear energy technologies actually are bomb resistant. These include updated versions of America's existing fleet of power plants and new reactor types that use tiny particles of coated fuel, which can bolster resistance to both accidents and plutonium extraction. The only question is whether our elected officials will have the wisdom to embrace this safer path. That would surely disappoint campaign contributors on the bomb-prone side of the nuclear industry. But it would allow us to modernize nuclear energy without inadvertently spreading nuclear weapons.
