According to recent research, more U.S. households are now comprised of renters than homeowners. That has many implications for community associations, property management companies, and other real estate professionals as they seek out insurance products that fit their most important needs.
The homeownership rate in the U.S. had been trending down for some time, but data on the population of renters was less accessible. A new study from the Pew Research Center sheds light on what now comprises the largest share of Americans. Pew found that as of 2016, more U.S. households were renting their home than at any point in the last 50 years. From 2006 until 2016, the number of renter households grew by 7.6 million, while the number of homeowners actually declined slightly.
Pew noted that major demographic groups, like young adults, have always tended toward renting rather than owning. However, researchers also saw a shift away from ownership in middle-aged adults, a group that had been consistently made up of homeowners until recently. And rental rates have seen increases among adults with higher levels of educational attainment, another trend that until now had not been present.
It’s not easy to know the exact cause behind any long-term economic trend, but most are in agreement that the 2008 housing crisis and recession played a major role in turning Americans away from homeownership. Both the uptick in rental rates and stagnation in homeownership since 2006 have occurred in the aftermath of the most recent financial crisis.
U.S. families may also be facing more options in home rental than what was previously available. The Wall Street Journal reported that since 2012, a handful of investment firms have spent billions of dollars to buy hundreds of thousands of suburban homes around the country. After paying in all cash and completing some renovations, the companies then list the homes for rent. This means that for households that can’t finance a home purchase, they might still enjoy the benefits of living in a full-size home rather than a cramped apartment.