High-income households have driven rental demand since 2010, according to the Harvard Joint Center for Housing Studies (JCHS). Households with incomes of $75,000 and above accounted for more than three-quarters of the growth in renters (3.2 million) from 2010 to 2018, while demand for middle- and low-income rentals have dealt with increased demand and reduced inventory.
Rental markets have seen further constraint by more people who would traditionally buy homes. Adults aged 35-64, married couples with children, and older adults are all more likely to rent than historically, and families with children now make up a larger share of renter households (29%) than owner households.
“Rising rents are making it increasingly difficult for households to save for a downpayment and become homeowners,” said Whitney Airgood-Obrycki, Research Associate at JCHS. “Young, college-educated households with high incomes are really driving current rental demand.”
Natural disasters have played a role in the rental squeeze as well. According to the report, 10.5 million of the country’s 43.7 million renter households live in zip codes that incurred at least $1 million in home and business losses due to natural disasters between 2008 and 2018. Additionally, 8.1 million renter households report that they do not have the financial resources to evacuate their homes if and when a disaster strikes.
Whether buying a home or renting a home is more affordable often depends on the type of market. While buying is the more affordable option in just a little more than half of U.S. counties, it tends to be the less affordable option in more dense metro areas, according to ATTOM Data Solutions’ latest Rental Affordability report.
Overall, buying is more affordable in 53% of the 855 counties ATTOM Data Solutions tracks.
The single-family rental investment market is poised for continued growth. On March 24-25, 2020, the Five Star Single-Family Rental Summit will unfold at the Four Seasons Resort & Club at Las Colinas in Dallas, bringing together industry experts for focused discussions on the future potential of this sector.