Some renters say homeownership isn't part of their American Dream: Renting is 'really freeing for me'

Owning a home has long been part of the American Dream. But in the country’s 250th year, many Americans feel the goal, a milestone of adulthood and a marker of financial success, eludes them.

Homeownership is something many people still aspire to. More than half (58%) of respondents said they’d need to own a home to feel they’d achieved the American Dream, according to a CNBC and SurveyMonkey American Dream Pulse Survey, second only to reaching financial stability.

But housing prices, borrowing costs and homeownership expenses are high. While homeowners can still build long-term wealth through their properties, experts say amassing equity can take longer today than it did for buyers in previous decades, given higher expenses and decelerating home value appreciation in today’s market conditions.

What’s more, renting is now cheaper than owning in every large metro in the country, according to a January LendingTree analysis of Census data. But the decision is increasingly swayed by more than the immediate costs: Over roughly the last decade, a growing share of people also say it’s more convenient or flexible to rent, it’s less financially risky, and they prefer it, for the short- or long-term.

“I never stopped and asked myself: Is it a value of mine to actually own property?” says Marina Brochado, who bought and sold four different homes throughout her lifetime before she returned to renting in her 40s. Homeownership, she says, wasn’t worth the hassle.

Even millionaire renters, who could afford to buy a home in cash, are on the rise. “Why would I spend more to own a worse place in a worse neighborhood, that requires me going to the worst place on Earth, Home Depot, every Saturday?” says personal finance expert Ramit Sethi, who says renting in both New York City and Los Angeles is a better financial and lifestyle decision for his family than buying in either location.

Higher-income households have been driving rental demand in the last five to 10 years, says Whitney Airgood-Obrycki, senior research associate at Harvard Joint Center for Housing Studies. That means a greater demand for buildings with premium amenities or space for a couple to grow their family.

There are now more options in the rental market to suit Americans’ changing tastes and evolving needs, from downtown apartments to single-family rentals to suburban options with a fenced-in yard, Airgood-Obrycki says. While homeownership remains out of financial reach for a growing share of Americans, she says, there’s also “a shift in what’s available and what’s culturally acceptable given how expensive it is to buy.”

With other housing options now available, the dream is changing for some Americans.

CNBC Make It spoke with renters around the country — millionaires, former homeowners, forever renters — for their thoughts on whether owning a home is still a part of their American Dream.

As told to Jennifer Liu. Interviews have beenedited andcondensedfor clarity.

Marina Brochado, 44, lives with her wife, Brenna Brochado, 41, and 15-year-old teenager outside of Boston. They pay $2,900 per month to rent a two-bedroom, 2½ bathroom townhouse with a finished basement.

I’ve bought and sold four different homes throughout my life. I decided to go back to renting about three years ago, and it’s the best decision I’ve ever made.

I got married in 2005 and we purchased our first home in 2008 in Raleigh, North Carolina. It was a four-bedroom, 2½ bathroom with a yard on a corner lot. It had a white picket fence and everything. It just felt like the thing to do: You get married, you buy a house, you get a dog, you have a kid.

We moved to the Boston area around 2012 after my daughter was born. We rented a condo and ended up buying it. In 2016 we sold the condo and bought what was supposed to be our forever home. Then I split up with my ex, so we sold that.

After my divorce, I bought a condo by myself in 2021, and a year into it, I realized that it was the biggest mistake I had made. All I did was look around and think about all the things that needed to get fixed.

In my late 30s, I realized I’d rather use my time and money to travel, see live music, go on wellness retreats, or get really good Red Sox tickets.

I went back to renting in 2023. My rent is $2,900. My last mortgage was around $2,200. The increased monthly cost is worth it because it’s about the mental load for me. I feel like I’m so much more available to being a parent and a partner because I’m not spending all of my time stressing about when the next thing breaks, can I afford it? In our rental, we are able to afford someone to help clean or walk the dog when my wife and I have to work.

I am Brazilian, so I moved here for the American Dream when I was 14. I thought I had made it when I got the white picket fence and the marriage. When I think about the American Dream now, it’s more about being able to provide for a life that has the least amount of stress possible.

We daydream about van life and traveling around the country. That, to me, would make me feel like I made it.

People do not factor in phantom costs of homeownership including taxes, interest, maintenance, transaction fees. Most of all, they don’t include opportunity cost, or the amount you could make if you took the down payment and invested it in the stock market.On a typical fixed 30-year mortgage, you are paying more towards interest than principal for [roughly] the first 20 years.

It’s important that people run the numbers. Specifically, ask: Is it a better financial decision to buy or to rent and invest the difference? If I buy, can I comfortably afford it? Are payments on this house less than 28% of my gross income, maybe even 32% or 34% in expensive cities?

Secondly, we have to ask ourselves, do I want to buy a house? Why? It might be that I want to buy a house because I prefer to live in this area, I want to send my kids to a certain school, I love to decorate and renovate, or frankly, I just want it. But we don’t ask those questions. We just go, “Oh, that’s what everybody does. So I’ve got to do it, too.”

I’m not against homeownership. At some point, I think my wife and I will buy a house. I personally love interior design and have a vision for what a future house would look like. Any family reasons could influence us. Carefully running the numbers would influence us.

I will say this: I know that whenever we buy a house, it is going to be the biggest financial mistake of our lives. And we will do it anyway, because you don’t always have to make decisions based solely on the numbers. There are plenty of other reasons to make a decision, but you do have to know the numbers.

Nick Waddell, 29, lives on his own in Charlotte, North Carolina. He pays $1,489 per month to rent a studio apartment.

I bought a two-bedroom, two-bathroom home in Columbia, South Carolina, about a year ago. I sold it in April because of the time, financial and mental burden it caused.

As a homeowner, you’re just constantly worrying about what’s going to happen next. I remember there was a small crack on the crown molding of my ceiling in my living room, and I was just worried thinking, “Is something going to happen to the roof?”

Having a yard was important to me at the time because I convinced myself I needed that space or in case I got a pet. Then I bought the home and realized I hardly ever used it. I thought I needed a home gym only to realize after I built it that I like going to an actual gym and having a community of people. I convinced myself I needed all these things out of a home, and then realized I didn’t utilize them.

I did take a step down in terms of size of place. My home was two bedrooms, but as a single guy, I only used about half of my house. Now I’m in a studio apartment in uptown Charlotte near the football and baseball stadiums.

I view going from being a homeowner to a renter as an empowering move. I think a lot of people would view that as a step back. People think renting is just throwing money away. I don’t really view it that way. Now I have my time freedom back, and I don’t have any worries if something happens to my dishwasher or fridge. I just call maintenance. It’s really freeing for me.

I started a career sabbatical around the time I sold my house. The flexibility of renting has allowed me to take a step back out of my pharmaceutical sales career and not be overwhelmed worrying about a mortgage or if something happens to the home.

I’m able to invest and save more of my money now that I otherwise would have been putting toward a mortgage and increased utilities. I also have more money for everyday things like going out on dates with my girlfriend. It’s freed up more of my money to spend on things that I get more value out of.