The new renters don't have to

Andy Doran and Meghan Seawell, married last year, are getting some well-meaning pressure to buy a house. "The expectation is that's what you do," Seawell said. "People say, 'Now's the time to buy,' or tell us we're 'throwing money away on rent.'"

But the St. Paul couple don't see it that way. "We like the freedom offered by renting," Doran said, including having money for travel and being able to call the landlord when something needs fixing. They may buy a house in the future, but they're in no rush. Doran believes home prices are still too high, relative to other things. Seawell thinks a financial cushion is a higher priority.

"In this economy, I want to have money in savings," she said. "You're giving up so much to call a house your own, when you can't even call it your own for 30 years."

Renting used to be what you did until you could afford to buy. As soon as you had a steady job and cash for a down payment, you bought a home. It was a rite of passage, a milestone on the road to the good life. But the recession is forging a different perspective on homeownership.

"I could buy," said Crystal Donelan of Minneapolis. "My friends have bought, and I realize that it's exciting. But it's not that tempting." Ownership brings added responsibilities and expenses, she said, and she likes knowing she can move whenever she wants to. "Somebody has to own, but it doesn't have to be me."

The house has long been the symbol of the American dream, said John Archer, cultural studies chairman at the University of Minnesota and author of "Architecture and Suburbia." But today, "younger renters are wisely realizing this is an unstable situation." Their wariness represents "a remarkable change in what the American dream is. This is the first crack in that, ever, that the American dream is not necessarily about acquiring a piece of property."

It's too soon to tell whether this is a short-term response to the struggling housing market, he said. But if it persists, "it's a landmark shift."

Mobility rules

Then there's the current job market, which makes homeownership less attractive than it used to be, Archer noted. "The idea of working for a corporation for 35 years and then retiring no longer exists. People will have to move to the job. They don't want an anchor that isn't liquid. Younger folks have more fear that the economy is unstable, and they value the opportunity that mobility affords them."

Owning used to make more financial sense than renting, for most consumers, "but the balance is teeter-tottering," said Tara-Nicholle Nelson, a consumer educator at Trulia.com, a real estate search engine and reference website. "There are generational segments for whom it has tilted. All [younger] people have seen of homeownership is the foreclosure mess. They have a hard time overcoming that in their minds. Being stuck geographically, so they couldn't pursue opportunities in the job market -- they see that as more of a liability than an asset."

For those who plan to stay in a home at least five to 10 years, owning probably still makes sense, Nelson said, although "it's very location-specific." (Trulia produces a quarterly rent-vs.-buy index for the 50 largest cities in the United States; Minneapolis falls in the middle. Twin Cities buyers should plan to stay in a home at least seven years, depending on the neighborhood, Nelson said.) "Owning is only wisely done as a long-term commitment."

Some people who have owned homes are opting not to do it again.

Americans have a bias against renters, she said. "There's that whole stigma: You're not really American unless you buy a house." Coming from Germany, she has a different perspective. "As Europeans, we all grow up renting. Our values of life don't center around homeownership. Peace of mind, quality of life are more important."

John Anderson of Savage owned a home when he lived in Tacoma, Wash., but he hasn't bought another one. "I do look at houses. My wife would like a house. But prices are out of whack relative to incomes," he said. "I don't think [home values] are done dropping because there's downward pressure on wages. The American dream has become the American nightmare. I'm relieved I don't own a house."

Even some current homeowners are rethinking their decision. "I'm an owner, but wish I was a renter," said Lance Goodeman of Albert Lea, Minn. A tree recently fell on his house, then it was flooded while he was out of town at a trade show. "Renters don't have to deal with that stuff. Everything you put into a house -- insurance, taxes, upkeep -- you never see that money again. We're kind of programmed to [buy]. But it's not all it's cracked up to be."

Of course, many of today's renters aren't renters by choice; they're former owners who lost their homes to foreclosure. "Those are the 'new renters,'" said Steve Rajavuori, a broker/owner with REI Property Management. "Some of them owned homes for 20 or 30 years. That's the biggest change -- people who used to be homeowners and are now forced to be renters."

Kim Palmer • 612-673-4784