Mark Uh, a researcher at Trulia, finds that the homeownership rate has dropped 5% in the 50 largest metropolitan areas since the Great Recession, while the renter-occupancy rate has increased by 5% from 36.1% to 41.1% of all households. The increase in renting occurred across all demographics, but was particularly pronounced among young adults, men, Hispanics, and households with higher incomes.
Using American Community Survey data from 2006 to 2014, the report examined homeownership and renter occupancy rates in the 50 largest U.S. metropolitan areas by age, gender, race, and income. Twenty-six to thirty-four year olds, typically considered to be at the prime age for first-time home buying, experienced a 10.9% increase in rental occupancy rates. Middle aged adults between 35 and 54 years of age saw a 7.8% increase in renting. Young adults between 18 and 25 years of age experienced a 5.9% increase in renting.
The shift to renting was greater for men than it was for women, although women are still more likely to be renters. The renter occupancy rate increased by 6.3% for men (31.8% to 38.1%) and 2.6% for women (41.4% to 44%).
Hispanic households saw the largest increase in renter occupancy, increasing by 8.7% (57.4% to 66.1%). Black households saw a 5% increase in renting (56. to 61%), while white households experienced a 4.9% increase (29.5% to 34.4%). White households remain the least likely racial group to be renters.
Upper and upper-middle income households saw larger increases in renting than lower income households. The renter occupancy rate for households in the top income quartile (top 25% of incomes) increased by 5% (12.3% to 17.3%), and households in the second income quartile saw a 6.3% increase (27.2% to 33.5%). Households in the bottom income quartile experienced a 3.7% increase in renter occupancy (61.1% to 64.8%), and remain by far the most likely to be renters.
With the growth in demand for rental housing, average rents have increased dramatically from 2006 to 2014 while average household incomes in the largest metro areas have declined. Average rents in the 50 largest metro areas increased 22.3%, while average incomes fell by 5.8%. The report indicates that that the average household spent 30.7% of its income on rent in 2014.
From Own To Rent: Who Lost The American Dream is available at http://on.trulia.com/1QZH2mR