A decade back I encountered vastly a higher percent of renter families saving up tens of thousands of dollars and moving out of their apt within a few years into their first homes.
These days I rarely ever come across a family that is even interested in saving to close on their first home. If anything, I more often come across families who used to own but cashed out around a decade back and now have little/no savings nor interest in ever owning again.
Perhaps it might have to do with this area, Socal (well, LA & OC) being bought up by investors?
What I do see is even single and 2-family homes rarely even owned by the occupants these days but instead by 'Investors' many of them from overseas (ie, China) with portfolios spanning dozens to hundreds of rental properties per person.
I do see to a vast extent that these neighborhoods that were once 'Owner' occupied have taken a turn for the worst (as far curb appeal, quietness, cleanliness, safety, etc) as they become vastly 'Renter' occupied.
The recession really hurt lots of folks. People who had been saving for years to afford a down payment ended up having to use it to make basic expenses when one or both people lost their jobs. People who had saved up everything and barely got into a house (finally!) lost it all when the economy tanked. Investors (domestic, overseas, whatever) were able to take advantage of the foreclosures on the market.
What you're seeing is no bearing on "kids these days" or a difference in people in general. What you're seeing is a direct result of a very significant international downturn that messed up a lot of people.
That "American Dream" is fading away. Most people rent due to income inequality, lack of wanting any responsibility, the recession, and oh yeah that thing called initiative.
I became a landlord in Jan 2011 and the tenates were newly weds and one of their parents. They insisted on having a 6 month lease as they planned on buying a home while renting in my place. Not wanting to deal with the whole finding renter thing so soon. They agreed and signed a year lease. It is now Apr 2015 and they are still there. Guess negotiating the lease length didn't matter. Not sure why they haven't bought a house, seems like 4 adults could save up and move out after that amount of time. In the mean time I'll keep up the cf while they pay my mortgage.
Most people who don't go to college can not find good jobs that they can buy a home. Most people who go to college have to pay their huge debt first after graduation, and they still need to find decent jobs too.
I am in Northern CA and have been amazed by some of the renters I have come across. It's not uncommon for them to ask about boat/RV parking and access. You will have a couple with a fairly high income and when they move in you see nice cars, a nice boat and a Harley that are worth more than a down payment. Some people have very strange priorities.
@Zach Liu brought up a good point. Student loans will be the next financial "what the heck happened here" moment. Those things are deadly and lawless. They will hold back countless Americans from ever being financially free or buying a home.
The next real estate mess will be caused by baby boomers using reverse mortgages and then passing away. Those companies will be left with properties they don't want and heirs that want "cash" not a problem they need to figure out.
I have hears it referred to as "the rent rut" where people starting out rent too expensive of a place , they have nothing left to save , they buy nice things and have nothing to save . Worst of all , they were never taught how to manage money .
the applicants that we see have no more than 3 or 4k in savings. not sure if they have other accounts that are not being revealed but they can't qualify.
a few had just 50 cents left in the bank account. crazy
I sure agree with all you folks have written.
I do wonder, though, if many renters know that they can rent to own? I sure didn't know about that before I bought a house, and I'm not sure my friends who still rent are aware of this option, either.
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing