Home Buyers Look to Renting Out Rooms to Balance Costs

As real estate prices get more expensive, some Americans have been renting out portions of their homes to help with mortgage payments, according to a Bloomberg report.

Average U.S. mortgage rates are now above 5% and home prices are at record highs, leading many would-be home buyers to feel homeownership is unattainable.

As a solution, some people have turned to renting out rooms or basements, using the extra income to help offset their housing costs.

Already common in the U.K. and Europe, the trend is now being seen in the U.S. The share of people renting out some of their homes for rental income rose to 31% in 2021, compared with 24% in 2019.

The report notes that the extra rental income means homeowners are actually able to keep up with their mortgage payments and other bills, which have ballooned to new heights by inflation and economic woes.

The idea of sharing costs is not a novel one, with Uber, Airbnb and other similar apps already having introduced the idea to younger generations as tech evolved. And millennials, who have 20% less wealth than their parents had at the same age, sometimes have found it helpful to engage in this practice.

Bloomberg reported that 67% of millennials and 57% of Gen Z consumers in the U.S. have said they’re willing to share their homes in exchange for cash. By contrast, just 34% of baby boomers were willing to do so.

PYMNTS wrote that the home price issues have spurred companies trying to make solutions. For instance, Zillow debuted a partnership with Down Payment Resource last December to help people afford the prices more easily — especially first-time buyers.

Read more: Zillow Launches Service to Help First-Time Buyers With Down Payments

The company said its home listings would now come with information about down payment assistance programs that could help, with potential buyers able to add information that is run through the Down Payment Resource database to get the list.