More households in America are headed by renters now than at any other time in the last 50 years, with owner household formation toppled by renter household formation in the past 10, according to a recent analysis of Census Bureau data by the Pew Research Center. Owner households dialed back from 76.1 million in 2006 to 75 million in 2016, while renter households expanded from 34.6 million to 43.3 million.
Pew researchers attribute the recent growth in renter households to not only groups that conventionally rent, such as young adults, but also to groups that have historically owned, such as middle-aged adults. In fact, from 2006 to 2016, renter households headed by those aged 35 to 44 and 45 to 64 climbed 10 percent and 6 percent, respectively.
Other groups are bucking tradition, as well. Renter households headed by whites, who have typically owned, rose 4 percent from 2006 to 2016. Renter households headed by college graduates, similarly, went up 7 percent over the same period.
The shifts, coupled with ongoing growth from groups that have had a long-held propensity for renting (e.g., black households, households headed by those without a high school degree), are contributing massively to the boom. The renter household explosion, in effect, is being fueled from all sides.
An adverse trend, however, has begun to take root. Earlier this year, the rate at which owner households were formed surpassed the rate at which renter households were formed, according to a Trulia report on Census data, pointing to the potential for a change of course. Other recent studies have highlighted the immense and immediate need for rentals, especially at attainable prices—another pressure point that could turn the tide back toward ownership.
Renters, most importantly, continue to see homeownership on their horizon. Eighty percent of those recently surveyed by the National Association of REALTORS® (NAR) believe owning a home is essential to achieving the American Dream; 63 percent of those recently surveyed by Zillow plan to become homeowners in the future.
Source: Pew Research Center
Suzanne De Vita is RISMedia’s online news editor. Email her your real estate news ideas at [email protected].
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