Single-Family Rental Growth Outpaces Total U.S Households
- Growth of single-family rental (SFR) households has far outpaced both total U.S. households and all owner-occupied single-family households since before the recession.
- Single-family households as a share of all households remain virtually unchanged from more than a decade ago.
- SFR’s share of the overall single-family market has risen considerably, accounting for about 1-in-5 single-family homes.
SFR Growth Accelerates Post-Recession
Looking before, during and after the Great Recession, we observe that the generational event had a substantial, lasting impact on the way Americans make their housing decisions. In this research, we focus on the market for single-family homes, where the prevalence of rental households has soared.
Since 2005, the number of single-family rental (SFR) households had swelled by more than 36%. Over the same period, the number of all U.S. households increased by 11%. During this time, all owner-occupied single-family households tepidly grew by less than 5%.
SFR’s share of all U.S. households sat below 11.4% before the financial crisis and pushed all the way up through the recovery to a high of 14.7%. It has remained elevated at 13.9% through 2017.
Single-Family’s Share of All Households Holds Steady
Despite the U.S. homeownership rate’s drop over this cycle, single-family’s collective share (owner-occupied and rental housing) of all U.S. households has barely budged. It has bounced between a low of 71% and a high of 73% over the 2005 to 2017 period.
Before the housing crisis, SFRs accounted for 15.5% of all single-family households. The rate climbed dramatically in the following years, topping up near 21% in 2014. As of 2017, SFRs accounted for a share of more than 19%, or roughly 1-in-5 single-family homes.
The above trends suggest that SFR’s growth may have had an equally, if not more impactful, effect on the decline of U.S. homeownership rates than urban in-migration.
While the latest data indicates that some SFR households began to transition to ownership amid favorable mortgage financing costs, the homeownership rate remains near historic lows and declined in early 2019. This implies that the new equilibrium rentership rate (particularly SFRs) sits well above where it had prior to when the recession began.
SFR’s market consolidation and formalization in recent years will only aide in the sector’s growth. Furthermore, SFR’s cross-section of flexibility, more space and favorable access to top public school systems has become increasingly apparent. Looking ahead, SFR’s role in America’s diverse landscape of housing options figures to be as prominent as ever.
For more SFR market trends and insights, read our Q1 2019 SFR report.
Note: All data is sourced from author calculations based on the American Community Survey (ACS) and Census Bureau household estimates, 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.