Renters Shun Homeownership Amid Rising Mortgage Obstacles

Americans are moving less than before, and this trend is consistent among renters, according to data from the Federal Reserve Bank of New York. In a report published by the bank, researchers found that renters who expect to move in the next three years decreased by over 20 percentage points between 2016 and 2026, from around 57% to 37%. Similarly, homeowners predicting a move fell from 20% to 14% during this period.

The growing challenges of homeownership are likely contributing to renters' decision to stay put. Researchers found that for renters, moving is closely associated with the decision to become a homeowner. As such, when renters have reduced expectations about future homeownership, they are less likely to move in the near future.

Renters who reported a low probability of owning a home had only a 1-in-4 chance of moving in the next three years. On the other hand, those who were confident they would own a home in the future, with a certainty rate of 81% to 100%, were more likely to move during this period.

Furthermore, the difficulty of obtaining a mortgage is increasingly becoming a concern for renters. In 2021, about 27% of people surveyed said getting a mortgage would be very difficult. By 2024, this number had risen to 45%. This shift in attitudes towards homeownership may indicate that renting is becoming a more appealing option.