2016 Rental Housing Demographics in the United States as Presented by Steve Murray of REAL Trends at NARPM 2016 Broker/Owner Retreat

Steve Murray at NARPM 2016 in Vegas, presented some fascinating demographic data about the rental market showing the industry is growing. Getting familiar with this data will help you improve your industry knowledge and give you a competitive advantage. Personally, I found the data fascinating…

Most notably, the Over-50 crowd is the fastest growing group of renters. They make fantastic renters, respect the property, and are easy to manage. The next fastest growing group are households with children, and there is growth in all income groups.

Some interesting bits of demographic data:

  1. Growth of renter-occupied single family (SF) largest in last 50 years measured by percent, age, & total numbers
  2. Homeownership rate peaked in 2004 at nearly 69%
  3. Today homeownership rate at 63.5%
  4. With total households of approx. 124 million, the shift means that some 8 million households who may have been homeowners in 2004 are now renters
  5. Joint Center for Housing Studies estimates that renter households grew by over 9 million between 2005 and 2015
  6. Over 42 million households are now renting
  7. Rental households have increased among all age groups, not just Millennials
  8. The fastest growing segment of rental households is the over-50 age group, where the rise was from 10 million households to 15 million households – accounting for over half the growth in rental households in last 10 years
  9. New household formations hit a net 1.05 million (JCHS) in 2015 – the highest level since the boomers came of age in the 1970’s
  10. Renter households with children represented over 25% of the growth in the last ten years and are projected to grow that percentage in the years ahead (2nd fastest growing group)
  11. Growth in renter households is occurring across all income groups, not just the lower quartiles of family incomes
  12. Home sales were up 9.5% in 2015 over 2014 and new and existing home sales hit 6.1 million – highest level since 2006
  13. Total aggregate value of home sales was approx. $1.6 trillion
  14. Homeownership rate overall at 63.5%
  15. For Millennials, homeownership is 6-7% less than historic norms at 27%
  16. For Generation X homeownership is 3-4% less than historic norms
  17. Boomer homeownership rate still above 77% but declining
  18. Purchases by foreign households in the 8-10% range
  19. Estimated purchases by investors both individual and corporate are range from a low of 12% to as high as 16% depending on source of information
  20. Corporate investors, while garnering great notice, are less than 2% of all purchases nationally
  21. Households who move from a single family rental also tend to move to another single family rental – 48%
  22. Affordability is a large and growing issue among both owners and renters
  23. Affordability crisis among those wishing to buy is most critical in large metropolitan areas both in coastal markets and some in midwest
  24. Among rental households nearly 25% are spending 50% or more of their monthly incomes on rent
  25. Cost for renting have grown faster than the cost of owning in most markets, while the national apartment vacancy rate has fallen to less than 4.5% – nearing record lows
  26. With household formation set to grow significantly higher the future for both owner and renter, households will be a problem, only in where and how will the inventory requirements be met, not whether we have customers for housing
  27. With household income growth less than historical norms the challenge is also, can ownership and/or rental opportunities be affordable

Source: RealTrends