End of the 9-Year Rental Housing Boom?

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by Wolf Richter, Wolf Street:

Since the Financial Crisis, the number of renters surged at a blistering pace, and renters became a majority in 42 cities, but the trend has now reversed.

The number of people living in rented housing in the US has surged by 23 million over the past 10 years. This is the period that includes the Housing Bust. But the number of people living in owner-occupied homes (“homeowners”) inched up only by 679,000.

Over the same period, the total US population has increased by 23.7 million. In other words, the growth in the renter population absorbed nearly the entire growth in the population.

In 2006, of the 100 largest cities, only 20 had a higher renter population than owner population. Ten years later, 42 cities do.

Of the top 100 cities, only three experienced a decrease in rentership rate: Anchorage, AK (-1.3%), Irving, TX (-2.5%) and Winston-Salem, NC (-3.6%). The other 97 cities all experienced an increase in rentership rates, according to a report by RentCafé, based on data from the Census Bureau’s American Community Survey.

The list below shows the 25 cities where the rentership rate has increased the fastest from 2006 to 2016. Gilbert, AZ, is number one. Its rentership rate grew by 53.4%. But Gilbert is special. While the absolute number of renters in Gilbert surged over the decade, the city’s overall population experienced a spectacular boom, and the number of homeowners surged too, and the rentership rate, at 30.6%, remains the second lowest of the top 100 cities, though it grew the fastest.

By contrast, Toledo is number five on this list. In 2006, its rentership rate was 38.3%. Over the past 10 years, the rate grew by 31.3% to reach 50.3%. But Toledo’s overall population declined over the period, which helped boost the rentership rate.

The cities in the list are in order of how fast their rentership rates grew (right column). Even for number 25, Baton Rouge, the rentership rate still grew by over 22%!

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