Has Vehicle Ownership Increased among Renters in the Post-Crisis Financing Environment?
While still below long-term averages, vehicle ownership is increasing across apartment properties.
Vehicle Ownership Rates Still Lower in Apartment Properties
The average US auto loan interest rate is currently at a historical low, reflecting the wider post-crisis lending environment, which has effectively encouraged consumers to spend more on goods and services.
More favorable financing conditions, combined with equally low gasoline prices, has resulted in a steady increase in car sales over the post-crisis recovery period.
While these trends are reflected in car ownership rates across all renter households, as further explained below, the extent varies by asset type.
As shown below, in 2016, car ownership was highest among households in suburban-oriented single-family rental properties, where 37% of households owned at least one car and another 55% owned two cars or more – in other words, only 8% did not own a car1.
In steep contrast, the share of households without a car was nearly three times higher in small asset apartment properties, and close to five times higher in the more downtown-oriented large apartment properties.
It is also noteworthy that apartment properties had significantly lower shares of households owning two or more cars compared to those owning a single vehicle – the mirror opposite of single-family rentals.
Car Ownership Increasing among Apartment Renters
While the more downtown-adjacent multifamily properties have lower car ownership rates, apartment renters have indeed been ready participants in the recent car sales boom.
As shown below, the share of households in small apartment properties owning two or more cars increased by 1.1 percentage points from 2014 to 2016, moving in lockstep with the shift away from no-car and single-car households.
In large multifamily properties, there was a noticeably broad shift from not owning any vehicles to owning at least one, and up the ladder, toward two or more vehicles.
For property managers, these trends are worth noting in terms of pricing and assigning more car spaces per unit, but the verdict is still unclear on the medium-term impacts of other developments, such as ride-hailing and working from home, thus necessitating a more informed wait-and-see approach.
1All 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.