The Dream Home Is Dead. Long Live Forever Renting

Whenever I’m feeling anxious or lonely there’s one thing I can do that always brings me joy: look at houses online. Maybe it’s because I’m at an age where I’m thinking about nesting and making babies, or maybe it’s that my love language is doing extensive amounts of research, but my god, I love to house-hunt. Give me a price range and a bedroom count and I’ll find you the house of your dreams on my lunch break. Nothing thrills me more than finding someone their forever home featuring anything they want, from crown moulding and a pool to a 28th-floor penthouse. 

And yet even though I could click through property listings for hours, thanks to the steep real estate prices in the high cost of living city I call home, the idea of actually buying my own home feels like an impossible task for the foreseeable future. It can sometimes seem like I’m the only one out there who has spent most of my money on rent, instead of saving for a down payment. Lately I’ve been wondering, Is there anyone else out there who’s planning on being a forever renter? As it turns out, I am absolutely not alone.

Forever renters — at least the ones to whom I spoke — tend to fall into a few different categories. First, there are those who are renting because they don’t have any other options. Heather, 41, who works for a non-profit organisation, has been renting alone or with roommates/partners for over 20 years. “In my twenties, I moved almost every year, either because the landlord didn’t want to renew the lease or because the rent was going up,” Heather says. “Eventually I moved to my current apartment with my now-husband and we’ve been here for 14 years.” In the 14 years they’ve been there, their rent has only been raised once. 

When Heather and her husband first moved to their neighbourhood, houses nearby went for around $400,000, and they thought, Maybe one day. But, while the housing market skyrocketed, Heather and her husband’s salaries plateaued. They realised they would be renting for the long term. “We could probably move to a lower cost of living city and buy a house, but we’d rather live in a vibrant, walkable area.” Heather explains. “Neither of us grew up with financial security or long-term childhood homes, so renting forever has always seemed like the only way.”

Similarly, Ray, a 25-year-old, has always lived in rentals. “Our housing situation was always a little precarious,” she says. “I lived in what I think of as my childhood home for nine years, but we were evicted when I was 14. I don’t know the full details, but I know my parents were struggling to pay rent. They got evicted again when I was 17, but we never really talked about it.” Her childhood experience, combined with astronomical rents, has led Ray to feel relatively committed to renting. “I view all of my living situations as temporary,” she explains. “I don’t decorate because I’m afraid of losing my security deposit. I have, like, two posters in my living room, but that’s it.” 

Similarly, Fatima, 25, shares that she's never lived in a home that wasn't rented. "I grew up with a single mother who lived paycheque to pay-cheque," she shares. Even though she's married and has some savings, she says she doesn't earn or save enough for home ownership to be a plausible option. "I feel like these days you need to have generational wealth to buy a home, or at least inherit your parents' home, so if you grew up poor and renting like me, it would take a lot of money to claw yourself into home ownership — and I just can't see how that will happen to me. I'd have to win the lottery or something."

For Zoe, 28, home ownership is not an option because she lived with undiagnosed bipolar disorder for the first 24 years of her life. "I wreaked havoc on my credit rating," she says. "I'm not sure how I'll be able to ever secure a home loan."

While there are those, like Ray, Heather, Fatima and Zoe, who rent because it’s their best, or only, option, others do so because they enjoy the freedom and lack of commitment. Marie, 26, says that owning a home in a city as expensive as Sydney feels unattainable. "Salaries aren't matching the cost of living and I'd rather live my life and have fun instead of sacrificing that to save to own a home," she says. "Without generational wealth and with a lower than average salary, unless I marry someone rich, I don't see it happening — so I'm going to keep having fun."

Aly, 29, loves the flexibility that renting affords her, since she would like to move abroad at some point with her husband. Aly chose her current apartment because it would be large enough for her and her husband as well as a kid, if they decide to have one in the next few years. “We really like not being extremely tied down or being responsible for the big things.” Aly says. “It’s really nice that when the water heater breaks or the roof needs replacing, we just have to call our landlord.” 

Aly’s choices are also informed by her life experience, which has included some abrupt transformations. “If I can get out of a toxic relationship with shared finances and housing and change my career path, I can get out of anything — homes included.” And, if Aly does ever own, it won’t be for living purposes, she says, but rather as an investment.

Kara, 32, also pulls from her life experience when it comes to her choice to rent. “I purchased a home with my ex-husband, and we ended up only owning it for a year and a half,” she says. Within a year of purchasing their new home, Kara and her then-husband got divorced. Now, Kara is remarried and doesn’t ever plan to purchase another home. “I can’t imagine saving for a down payment again. And, I love our new townhome. I’m looking forward to getting to know our landlord and becoming part of the neighbourhood — we don’t plan to leave any time soon. I have investment and retirement accounts and my wife has her own savings, and I like that I’ll never have to worry about losing money on a house.”

And yet, despite the fact that so many people — whether by choice or not — are forever-renters, it’s rare for that reality to be portrayed as being okay, or even beneficial. Instead, buying a house is always presented as being desirable — a better investment and, therefore, a better choice. Conversely, renting long-term is cast as being a waste, and to be avoided at all costs. But, the idea that renting is just lighting money on fire is not exactly correct. Renters are not throwing money away, they’re paying for a service — namely, a place to live that is taken care of by somebody else.  This isn’t to say that it isn’t advantageous to own instead of rent, but renting is usually the more affordable choice — and owning property isn’t the only way to build equity or increase wealth. 

“If you’re a forever renter, you can still build wealth by investing in the market,” explains Paco de Leon, a financial advisor and founder of The Hell Yeah Group. “Unlike homeownership, you don’t need a large sum of money to get started and you won’t have additional costs to maintain your investment. From a pure investment perspective, it’s possible to generate a greater return through investing in the market than buying a home.” In fact, the only time in history that the real estate market out-returned the stock market was between 1990 and 2006. De Leon only recommends purchasing a house if you have a healthy emergency fund (including emergency housing expenses) and a down payment of 20% or more. “I have a very conservative perspective when it comes to how much cash you should have on hand because of what I witnessed firsthand during the housing crisis and its aftermath,” she says. 

In the same way that the myth of a “dream job” has now been debunked, the idea that owning a home is the end-all-be-all goal for a financially stable adult is proving to be incompatible with many people’s realities. Purchasing a home — while still an understandable and common desire — is not the only way to build wealth, or even to live well. Just as someone might find real happiness by having a “good enough” job and pursuing passions in other forms than their work, people can find stability in rented homes and invest money elsewhere. As for me, I might not wind up a forever renter — I still have dreams of homeownership one day — but for now, I’ll enjoy house-hunting for friends, and bookmarking every dream home I come across. Just in case.