More U.S. households are currently renters than at any point since 1965, according to the Pew Research Center. There are definite benefits to renting a home, for example, you don’t need to take out a mortgage or worry about property taxes or building maintenance. In fact, according to a Pew Research Center survey, a third of today’s renters say they are renting by choice, not circumstances. That said, the same survey found that seven-in-ten renters say they hope to own a home one day.
Owning a home has its advantages as well, it’s a long term investment that helps you build equity, it can give you a form of stability, and can at times result in tax benefits. But how does renting compare to homeownership in the U.S.? We broke down the facts, figures, and statistics surrounding renting and home owning across the country.
Homeowners vs. renters: By the numbers
67.4% - National homeownership rate in 2020
65% - Percentage of renters that are young adults
72% - Percentage of renters who said they want to own a home one day, according to a 2016 Pew Research Survey
37% - Percentage of renters who live in an apartment
42% - Percentage of homeowners that are between the ages of 45 to 64 years old
$1,160 - Median asking rent for vacant rental units in the U.S. as of October 2020, according to the U.S. Census Bureau Current Population Survey/Housing Vacancy Survey
$234,500 - Median asking sales price for vacant for sale units, according to the U.S. Census Bureau
$1,200 - Estimated average cost of homeowners insurance per year in the U.S.
$180 - Estimated average cost of renters insurance per year
95% - Percentage of homeowners who have homeowners insurance, according to the III
37% - Percentage of renters who have renters insurance, according to the III
Ready to shop home insurance?
Homeowners insurance vs. renters insurance: Understanding the differences
Both homeowners insurance and renters insurance provide financial protection for policyholders. One of the main differences between the two is who the policy protects: renters insurance protects tenants who rent their homes, and homeowners insurance protects people who own their homes. And while homeowners insurance protects the actual structure of the home (as well as the belongings inside it), renters insurance only protects a renter’s personal property, not the physical home that they rent.
Below are the basic components of renters insurance and homeowners insurance:
Renters insurance: Protection for renters who rent their home. Renters insurance protects a tenant’s personal property, but not the actual home itself. A standard policy contains personal property protection, loss of use coverage, and personal liability coverage.
Homeowners insurance: Protection for people who own their home. Homeowners insurance protects the physical structure of a home and the homeowner’s belongings. A standard policy contains dwelling coverage, other structures coverage, personal property coverage, loss of use coverage, personal liability coverage, and medical payments coverage.
Learn more about the differences between renters insurance and homeowners insurance here.