The percentage of US households who own their home is at its lowest percentage since 1965. Conversely, the number of renters is at an all-time high.
According to Buildium, 2016 was a great year to own a rental property. More than ever, Americans are seeking rental housing, and the number is only expected to increase in the foreseeable future.
Recent History of American Home Owners
In past years, the percent of Americans who own homes has hovered consistently at 65%. During the second quarter of 2004, home ownership reached 69.2%, before leveling off during the 2008 housing crisis. Today, 62.9% of Americans are homeowners.
This has led to a spike in Americans seeking rental homes. In the first quarter of 2016, approximately 363,000 new rental households sprang onto the market, compared to 177,000 during the same time in 2015.
American Renters by the Numbers
- In 2016, 37% of all households rented their housing.
- From 2005-2015, the number of rental households skyrocketed by almost 9 million. This is a historic high.
- Renters caused all housing net growth since 2005.
- Per generation, Milennials have added 1 million rental households, Gen X 3 million, and Baby Boomers 4.3 million.
- A third of rental household incomes are less than $25,000, while 11% earn $100,000 or more.
- More than half of rental households are foreign-born or minorities. This demographic makes up 25% of homeowners. Black and Hispanic households make up 20% of renters and 10% of homeowners.
- In suburban areas, 28% of residents rent, while in cities that percentage is over 50.
- 27% of home-owning households are families with children, compared to 31% of renters.
What is Causing This Rental Spike?
According to Buildium, all three relevant generations are likely to seek rental homes in the near future. Since salaries are not increasing at the same rate as housing costs, Milennials are unable to save for a down payment while affording high rent prices. Generation X felt the effects of the 2008 housing crisis, and many have bad credit that prevents them from obtaining a mortgage.
Baby Boomers are looking for smaller rental properties as they downsize and prepare for retirement. To top it off, the number of those immigrating to the USA is expected to dramatically increase, and this group is historically likely to rent.
Buildium reported declining homeownership as one of the top nine real estate trends of 2016. View the other eight trends here.
