Meet the Forever Renters

Are you really better off buying? Many who live in our region don’t think so.

July 5, 2013

Personal trainer Bernard Moore says his busy work schedule would make it hard for him to deal with home-maintenance. He’s happier to let his landlord do it.

Personal trainer Bernard Moore is out the door of his northeast D.C. apartment by 5:30 each morning and doesn’t get home until 8 or 9 each night. He works at a gym in Alexandria, so he isn’t around to let the exterminator or the air-conditioner repairman into his home when issues arise.

Not a problem: His landlord handles that.

With mortgage rates hovering at less than 5 percent, buying a home seems like the “in” thing to do right now, but some Washingtonians aren’t swayed. Like Moore, 61, these “forever renters” choose to ignore the pressure to buy.

“Just like everything in life, one size does not fit all,” says Christie Hardcastle, a financial educator for CredAbility, a HUD-certified credit-counseling agency. “It’s not that it’s not a great time to buy; it’s just not for everyone. ‘Renting’ is not a bad word.”

For many, the lifestyle benefits of renting — such as having the ability to move frequently and knowing that someone else will take care of home repairs — outweigh any financial gains that might come from owning.

“You don’t have any of the worries that homeowners have,” says Moore, a renter for 40 years. “If something is broken, I don’t have to worry about that.”

In Moore’s case, staying home to manage repairs would be a scheduling nightmare for him and his clients, one that could end up costing him money. “It would be extremely hard, especially with the work I do,” he says. “If I don’t work, I don’t get paid.”

It’s not just the convenience factor that leads Washingtonians to rent long term. Many witnessed the financial risks of owning during the 2008 housing crisis and are now wary of buying.

“I’ve seen what the housing market crisis has done to a lot of people who are close to me, including members of my family,” says Aimée Cedres, 27, a Johns Hopkins graduate student who rents a one-bedroom apartment near Catholic University. “So I’m just kind of very hesitant to jump on any kind of housing purchase.”

Cedres might be wise to think that way. “I think we need to resist this temptation of where we once were,” says Ted Gayer, a senior fellow at the Brookings Institution, “which is: ‘You gotta buy a house; you’re wasting money if you’re renting; buy it as soon as possible, no matter what.’ ”

It’s not always true that owning a home is a better financial choice than renting, he says. Take the concept of wealth accumulation. “If you’re buying a house and you’re paying your mortgage, you’re putting equity in your home,” Gayer says. It’s essentially “forced savings.” That might make buying seem like a no-brainer, but there’s one big problem with it: There’s no guarantee that your investment is safe. You’re putting a whole lot of money into one place, so if the housing market tanks, you’ve put all of your eggs in one basket — er, home.

Low interest rates for mortgages do make buying attractive — the lower the rate, the less money you have to pay each month. But if you put too little money down on that low-interest-rate mortgage and the home’s value declines, you could end up owing more than the house is worth.

“Just because you can buy a house with 5 percent down,” Hardcastle says, “doesn’t mean that it’s a good idea.”

The more money you can put down, the safer your investment. But that big down payment could empty your savings and leave you without money for maintenance of your new home or that trip to Disney you were planning.

In the end, the choice to rent or buy really comes down to your values and priorities.

With student loans to pay off and the desire to move easily for work, Cedres has no plans to buy anytime soon. “The idea of buying a house is like Star Wars to me,” she says. “It’s a very remote possibility.”

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