The last 10 years have really been the rental housing decade. Let’s look back at 12 important trends that we’ve seen in the industry, and see what they show us. You may know some of these from your day-to-day work, but others may surprise you.
The research team at RentCafé prepared the report using data from the U.S. Census Bureau, Yardi Matrix, PropertyShark, and U.S. News World Report.
The rental housing decade: 10 years, 12 trends
“We examined a number of economic and demographic indicators to get an overview of the housing trends that shaped the country in the past 10 years,” said RentCafé in the report. “This past decade has transformed the relationship between America and its housing, especially when it comes to renting.”
No. 1 Rental growth
Average rents in the past decade nationally have increased 36 percent or $390, outpacing median home prices and median income.
Of the cities with complete data for the rental housing decade, Oakland saw the highest rent growth, at 108 percent. National average rent is currently $1,473.
2. More and more renters
The number of renters in the United States passed 100 million in the last 10 years.
That’s an increase of 9.1 percent, or two times faster than home owners at 4.3 percent. The percentage of those who rent, 34 percent, was the largest since the ’60s.
3. Large cities dominated by renters
Twenty U.S .cities made the switch from a homeowner majority to a renter majority.
At the end of the rental housing decade, a third of the 260 largest cities are dominated by renters. Manhattan crowns itself as THE city of renters, with 77 percent of its population living in apartments.
4. High-earning renters
More high-earning Americans are renting than ever.
The number of renter households earning $150,000 a year increased two times faster, 157 percent, than that of high-income owner households at 78 percent.
5. Fewer children
The number of homeowner families with children dropped significantly, by more than 1 million, down 5.6 percent, while the number of renting families with children was nearly stagnant, down slightly at 0.5 percent.
6. Senior renters grow
Renting has increased in popularity among seniors.
The number of households with renters over 60 rose by 32 percent, outpacing younger segments and even homeowners in the same age group.
7. Rental construction growth
In a construction boom unseen since the 1980s, 2.4 million rental units were delivered this decade.
A significant 40 percent of these units were classified as luxury.
Texas overshadowed the rest of the United States, with four of the top 20 metros nationwide building the most units this decade.
8. Apartment size shrinking
The average size of newly built apartments decreased by 57 square feet (the size of a medium bathroom) in the past decade, from 990 square feet to 933.
9. Suburban rent growth
Suburbs added renters at a faster pace, 17 percent, compared to cities, at 14 percent.
Top 20 Metros by Increase in the Number of Suburban Renters This Decade:
In 40 of the 50 largest metro areas, suburbs eclipsed urban areas in terms of renter population growth.
10. Renters live in multifamily units
Almost two-thirds of renters live now in multifamily units.
Growth in this sector was consistent in the past decade, while single-family rentals witnessed a slowdown as the economy stabilized after the recession.
11. Declining population in expensive metros
The nation’s priciest metros, such as New York or Los Angeles, have been shrinking in population as their residents moved to more affordable areas.
12. Millennials going to job hubs
Most of the millennials entered the job market this decade. If in 2010 the top 10 cities with the highest share of millennials were college towns, in 2018 those had been replaced by job hubs.
Top 10 Cities With the Highest Share of Millennials at the Beginning and End of the Decade:
- Rent data was provided by Yardi Matrix, a business development and asset management tool for brokers, sponsors, banks and equity sources underwriting investments in the multifamily, office, industrial and self-storage sectors. The data on average rents comes directly from competitively-rented (market-rate) large-scale multifamily properties (50+ units in size), via telephone survey.
- Median sale price values were provided by PropertyShark and cover residential transactions for condo, co-ops, and single- and two-family homes closed in 2010 and 2018, respectively. Home sale prices for 2019 were in some cases calculated using the CPI-adjusted value for 2018. Cities with insufficient data were excluded.
- Median household income source: U.S. Census Bureau ACS 1-year estimates. The 2019 median household income is based on CPI-adjusted data from 2018.
- College tuition data was sourced from the U.S. News & World Report.