Amex Spending Tracker Shows Renting at Five-Year High
Springtime is the season for house hunting, but many people planning to move this year say they’ll rent, not buy, their new digs.
The American Express Spending & Saving Tracker surveyed 1800 adults in February 2016 and found that 17% of them plan to move sometime this calendar year. More than half—53%–said they would look to rent a house or apartment rather than buy a new place. That’s the highest number of prospective renters since American Express started polling people about this subject in 2012.
Last year, 46% of movers polled by Amex said they were planning to buy a home; this year only 40% said they’d be looking to close on a home purchase.
The decrease in buyers doesn’t necessarily signify a downturn in the economy, said American Express officials. “In general, Americans are feeling confident about the economy and their own financial stability, yet they’re buying fewer homes,” said American Express VP of Consumer Lending Jed Scala.
So what’s the reason for fewer mortgage applications this year? Scala said it could be indicative of “a shift in the cultural mindset—especially among Millennials—who value flexibility and freedom.” Scala said young people might see home ownership as suffocating, and runs counter to their desire to be footloose and fancy-free.
Millennials on the move
They might not be ready to buy homes, but many young people are moving this year. One-third of Millennials surveyed said they’d be packing up moving boxes in 2016. Fifty-five percent of them will be renting a new place, and 41% are looking to buy; about the same as last year. Thirty-two percent of Millennial respondents said they thought the housing market would be better for buying one or two years down the road.
In contrast to the peripatetic Millennial demographic, only 15% of Generation X respondents said they planned to move this year, and 10% of Baby Boomers. This could be due to more Millennials undergoing big life changes like getting a first job or having a baby. Older people tend to be more settled—though more Baby Boomers could be moving as their kids move out and they have an empty nest.
Home improvements instead of moving
Folks who aren’t moving, are improving. Seventy-six percent of those polled said they’d be shelling out for some significant home improvements this year. And they plan to spend more than last year; an average of $5,100 this year, versus $4,100 in 2015.