Building homes got more expensive this year, thanks to a tight labor market and tariffs that bumped up the cost of materials.
But lately homebuilders are feeling better; lower mortgage rates should increase demand. The U.S. Census Bureau said those builders started work on 12% more homes in August than in July. Much of that increase came from construction of apartments and condos, up by more than 30%.
Meanwhile, plenty of renters are happy to keep on renting. Katie Vance, 37, is an executive assistant at a venture capital fund and pays $3,000 a month for a 750-square-foot Manhattan studio. She says the possibility of changing jobs and not knowing what the future may hold keeps her from buying.
“I don’t trust myself to buy,” she said. “I don’t want to say I’m a nomad, but I don’t really know where I’d want to put down roots.”
Michaela Kron, 29, a public relations manager in Pittsburgh, had her pick of apartments when she moved to the city. Buildings were offering all kinds of perks, like a free month of rent.
She pays $1,450 a month for a one-bedroom apartment and has no plans to buy. For Kron, renting is more convenient. Especially when things break and maintenance just shows up.
“Ultimately, it saves me a lot of time and a lot of effort so I don’t have to worry as much,” she said.
Others, however, are trying to make that leap to homeownership. Like J.L. Johnson, a 34-year-old technology manager at a health care company, who lives outside Kansas City in Lee’s Summit, Missouri.
Johnson figured the roughly $100,000 he and his wife make annually should have been enough for a place he’d be happy with. But they found a townhouse for about $1,000 a month and it’s just sort of rundown, Johnson said.
He’d like to save up for a nicer place, but student loans and rising home prices are making that tough.
“I think that’s the part that’s really discouraging, my wife and I do very well,” said Johnson, “and we live in something comparable to what lived in when I was 19 and moved out for the first time.
“I don’t think … I fully understood the implications when I was financing my education. But it’s certainly a barrier to our success,” he said.