From the crest prior to the recession up through 2016, the country’s largest markets now have more renters, according to an analysis recently released by Zillow. In 2000, the rate of renters was 33 percent; from 2006 to 2016, the rate rose from 31 percent to 36 percent.
More than half of the 50 largest markets have more renters today, according to the analysis. The reason for the rise is varied. According to Aaron Terrazas, senior economist at Zillow, in the downturn, foreclosed-on homeowners rented, with many renting, still, today. Many are postponing purchases, as well—and, there is a convenience factor.
“The share of U.S. households that rent surged in the wake of the Great Recession, as millions of families were foreclosed upon and younger adults either chose to or had no choice but to rent for longer,” says Terrazas. “Renting remains more common years after the recession ended and after a historically long national economic expansion. Some of this shift is attributable to lifestyle choices, including young adults delaying marriage and starting families, and a strong preference for living in urban cores where renting is often more convenient and financially feasible.
“Some is also driven by economic necessity—quickly rising home values can make it difficult for some to enter the market to begin with—and many previously foreclosed-upon families remain unable to purchase again, even years after foreclosure,” Terrazas says. “The homeownership rate is slowly rising—the most recent data show a sharp surge in young adult homeownership over the past two years—but it will likely take many years, if ever, for it to get back to its lofty pre-recession peaks.”
Over the 2006-2016 period, the biggest growth in renter share was in Memphis, Tenn., where, according to the analysis, the amount of households that rented rose from 45.1 percent to 56.1 percent. Other cities with considerable jumps: Honolulu, Hawaii and Las Vegas, Nev. (by 9 percent); Mesa, Ariz. (by 8.5 percent); and Atlanta, Ga. (by 8.3 percent).
For more information, please visit www.zillow.com.