In the wake of the Great Recession, the housing market significantly weakened as home values were slashed, origination volumes slowed, and prospective buyers refrained from entering the market.
Now, ten years following the collapse, the nation’s economic landscape has changed dramatically, and with it so has the relationship between consumer and housing market.
As the decade comes to a close, Rentcafé, a nationwide internet listing service, claims renter rates have climbed across the country as more and more Americans are now choosing to rent instead of own.
According to the company’s decade report, the renter population has become more than 100 million strong after a decade of sustained growth, as the number of American renters reached 108.5 million in 2018, up from 99.4 million in 2010.
Although the percentage of renters in the general population has fluctuated throughout the years, Rentcafé says its growth has been consistent since the beginning of the millennium.
In fact, the company claims there are 74% more renters today than there were in 1960, with their numbers growing by 46 million since that time period.
“While the recession pushed many to rent out of necessity, the economic expansion which followed, coupled with changing attitudes towards family and homeownership, lead to the rise of the renter by choice,” Rentcafé writes. “Rentership rates expanded across the board—from young families to seniors, from city cores to suburbs, many Americans have shifted away from homeownership.”
RentCafé indicates the share of renters makes up 34% of America’s general population and on a national level, since 2010, the number of renters has increased two times faster than the number of homeowners, climbing by 9.1% and 4.3%, respectively.
Now, in 2019, 20 U.S. cities have made the switch from a homeowner majority to a renter majority, pushing the share of renter-majority cities from 28% to 32%, according to the company.
This growth, which has partially been driven by the perceived affordability of renting, has actually led to an uptick in price appreciation.
Since 2010, RentCafé says the national average rent has increased by $390 or 36%, largely attributed to increases in valuable land, progressively sophisticated apartments, and job prospects.
As renting becomes a more popular option for housing, regardless of age and income, data shows more wealthy Americans are choosing to rent over owning.
According to the company, the number of renting households that earn more than $150k per year has increased two times faster than the number of high-earning homeowner households since 2010, rising at 156% and 78%, respectively.
“While 150k translates differently depending on where you live, the number of high-earning renter households at least doubled in a significant 46 of the nation’s 50 largest cities,” RentCafé writes. “At the same time, five cities had a majority of renters earning over 150k a year in 2018, up from two in 2010.”
NOTE: Rentcafé utilized data from Yardi Matrix, the U.S. Census Bureau and the U.S. News and World Report to create the Decade Report.