Retirement Planning, Elder Law, and Senior Finance The Benefits of Renting for Retirees 8/9/2023 | By Sandra Block With average single-family home prices up nearly 24% since 2020 and home mortgage rates hovering above 6.5%, renting for retirees may be a better choice when relocating. Kiplinger’s has long recommended renting in a potential retirement destination before buying a house, and that advice is even more compelling now. Even if you can afford to buy a home — perhaps with cash from the sale of your existing home — you may have a difficult time finding one that suits your needs. Many homeowners with fixed-rate mortgages of 3% or less are unwilling to sell, even if they’ve outgrown their homes. That has led to a shortage of homes for sale, particularly smaller houses that appeal to downsizing retirees. The boom in housing values has also boosted rental costs. The lack of affordable housing increased demand for rental properties, which pushed up the median cost of renting by nearly 30% between Jan. 1, 2020, and Aug. 1, 2022, according to data from Rent, which tracks listings for apartments and rental houses. However, monthly rental rates have started to moderate. A recent report from Zumper, an online marketplace for renters and landlords, found that the median price for a one-bedroom apartment was flat, at $1,495 a month. The median price for a two-bedroom apartment rose half a percentage point, to $1,842. A boom in real estate development in Sunbelt cities has led to an oversupply of rental properties and an increase in vacancies, says Jay Lybik, national director of multifamily analytics for CoStar Group. “If you’re looking for an apartment in Phoenix or Austin or Tampa, there’s a fantastic amount of new supply coming online,” he says. Perhaps the main reason to rent, at least initially, is that it’s a lot easier to change your mind. “Even the most desirable cities are going to have less-than-desirable areas,” says Nick Lyons, a certified financial planner in Houston. “Rather than buying a new home and incurring all of that upfront cost, renting will give some mobility and flexibility to assess whether you like that area.” Renting can also save money on home ownership costs. Besides a mortgage, homeowners must pay homeowners insurance, property taxes and the cost of maintenance and repairs, all of which are subject to increases. Apartment living offers many benefits for retirees. Apartment complexes are often close to community centers and within walking distance of restaurants and other attractions, says Michelle Polowy, a senior content marketing associate with Zumper. Many also offer amenities, such as swimming pools and fitness centers. If you’d prefer living in a house, the proliferation of homes available through Airbnb, VRBO and other short-term rental services provides plenty of options for retirees who want to rent. Some of these property owners may be delighted to negotiate a long-term rental arrangement, particularly with retirees who are unlikely to leave the premises in disarray when they move out. Next up: Top places to retire Sandra Block is a senior editor at Kiplinger’s Personal Finance magazine. For more on this and similar money topics, visit Kiplinger.com. ©2023 The Kiplinger Washington Editors, Inc. Distributed by Tribune Content Agency, LLC. Read similar articles on Seniors Guide such as this one: How to Lower Taxes on Social Security Benefits Related to The Benefits of Renting for Retirees: What Are Senior Apartments? Plus: The Seniors Guide overview of Senior Apartments Read More Sandra Block Sandra Block is a senior editor at Kiplinger’s Personal Finance magazine. For more on this and similar money topics, visit Kiplinger.com.