Families with Children Dominate Single-Family Rental Demand, Single Renters on the Rise in Apartments
A closer examination of household composition, including single renters and families, as well as living arrangements reveals distinct patterns across rental asset classes.
Families Drawn to Smaller Multifamily Properties
Rental product offerings are distinctly specialized. Small asset multifamily’s affordable profile has allowed the asset class to cater to families. However, deeper analysis uncovers its success in capturing single renter demand as well.
As shown below, single renters living alone and families with children comprised around 70% of all households in small properties. Single renters formed 45% of the total demand1.
This picture is flipped in single-family rentals (SFRs), where, as expected, families with children formed the modal demand group — representing 45% of total households in this asset class.
The U.S. Census Bureau’s 2016 American Community Survey (ACS) snapshot for large asset multifamily is strikingly different. Single renters alone comprised nearly 60% of all households in large multifamily. Families with children made up a share of less than 15%.
Families without children present an interesting sub-segment. This group is equally represented in small and large apartment properties, where they account for 17% of households in both. In SFRs, they make up a slightly higher share of 22%.
Distributional Shift Towards Single Renters and Families without Children
When comparing household types in 2014 and 2016, there were some broader movements impacting the rental housing market.
As shown below, small asset properties displayed a noticeable shift away from families with children, whose shares went down by 121 basis points (bps) between 2014 and 2016. This is a similar trend across the rental market, which reflects the recent slight uptick in homeownership rates.
In comparison, small asset single renters and families without children show overall share gains close to 50 bps over this period. Apartment shares also increased their presence by 26 bps. These patterns are similar across the rental market to varying degrees.
Going forward, with the improving economy and wages, property operators need to keep a watchful eye on homeownership. This could have direct implications for unit mix and amenities catering to smaller and older households.
Interested in learning more about Arbor’s loan solutions? Read more about our single-family rental and small multifamily financing programs.
1 All data is sourced from the American Community Survey (ACS), unless otherwise stated. ACS statistics are sample-based estimates of the compositional profile of the total population in the given year of data collection, and include a margin of error.