U.S. homeownership rates have fallen to their lowest point since 1997, despite stabilizing housing prices here in Massachusetts, and enduring low interest rates.
Two years ago, as part of a series on homeownership called “The Depreciating American Dream,” WBUR profiled two Brighton couples who were renting with no regrets. We followed up to find out whether they’ve changed their tunes.
BOSTON — We last heard from Prashant Jeloka and Meenal Bagla in their creaky apartment building in Brighton. Two years later, the married couple in their early thirties is still renting, but they’re in a very different place now. It’s a brand-new high-rise apartment complex in India, in the booming New Delhi suburb of Gurgaon. Bagla is putting on a party for her brother, who just had a baby girl.
“Personally, yeah, I mean it’s been fantastic,” Bagla said. “I’m glad that I was here for that milestone. So it makes me happy that I’m close to family.”
Returning to India for a while been good for her professionally, too. Bagla’s U.S. employer asked her to set up a practice in India. And she and her husband are glad that they did not buy a house in Boston two years ago, back when Congress was giving an $8,000 tax credit for first-time homebuyers.
“I don’t regret having not bought at all, because I think it gave us the flexibility at the time that we needed it,” Bagla said.
Jeloka said buying would have made picking up and moving harder to do too. It didn’t have to be India, it could have been Indianapolis — either way, they would have had to sell or rent out their house.
“And if it was expensive enough, we might have chosen not to do it, which I would have regretted more than anything else,” Jeloka said.
Now they’re moving back to U.S., looking for jobs in Boston, New York and San Francisco. And they might buy a house, but that’s only because this time they’re planning to put down roots for at least 10 to 15 years.
Jeloka said they haven’t changed their philosophy about renting versus buying.
“I don’t think we have,” he said. “Renting gives us some benefits which we’ve enjoyed so far. Buying gives us some financial benefits, only if we do it long-term. And now that we are thinking long-term, we might be open to doing it. The fundamental thinking hasn’t changed at all, I don’t think.”
What has changed is that more people are thinking like them.
“At the end of each class, at the end of each term, I ask my MBA students, how many of them are going to buy a home?” said Joe Gyourko, who teaches real estate at The Wharton School. “And there has been a really sharp drop.”
Gyourko said five years ago, more than half the class would raise their hands. At the end of this semester, only two students did.
“So young people, I’ve often wondered why they own in such high propensities,” he said. “Because they should be more mobile and be able to move to opportunities. Because their careers aren’t set. So I think this is actually not a bad thing.”
The older couple we profiled two years ago is still renting, too. When we last spoke to John and Barbara Horan, they’d been living in the same triple-decker apartment off of Brighton Center for 40 years. Now, two years later, it’s been 42 years renting the same apartment.
“John did the kitchen — painted the kitchen and the ceiling, that’s done,” Barbara said. “Um, last couple of weeks we tackled doing all of the floors ourselves.”
Barbara and John just bought new furniture, too. They raised their kids here. They have a great relationship with the landlord. Barbara Horan doesn’t ever want to move.
“Next place I go is to the funeral parlor!” she said, laughing. “I have all this stuff! I mean, I’m settled.”
But there’s a tradeoff. For the past 42 years, they didn’t have money tied up in a house — they’ve been investing in it. But they don’t own. And so, any day, John said, the landlord could kick them out. Maybe he passes away and the kids sell the house.
“At some point in time it’s gonna happen,” John said. “You know, they’re gonna decide to, whatever, I don’t know what. That’s all right, it’s a matter of time, Barb! It could be tomorrow, it could be 10 years from now, who knows?”
But that uncertainty doesn’t bother him that much. They’ve had a great run here. They have money in the bank. John said there’s always someplace else they could rent.
“I guess I’m an optimist. I’ll find something,” he said.
Two couples, two years later, still renting with no regrets.