After a decade’s worth of demographic and economic shifts, the U.S. has seen significant change in the balance between renters and homeowners according to a new ValuePenguin.com report. Most notably, the study found that millennial homeownership rates fell 20% in the past decade.
As the increase in renter households continue to outpace the growth of homeowners across all generations, the study also found that renters have become more likely to rent types of housing that have historically been far more popular among homeowners.
- Millennials are less likely to own a home than to rent or stay with parents. From 2009 to 2016, there was a gradual drop in the number of households that owned a home and were headed by someone under age 35. Millennial householders accounted for over 12% of all U.S. homeowners in 2009, but fell year after year to a low of 9.8% by 2016. Within the millennial age group, the number of homeowner households fell by 18.5% over eight years.
- The Millennial homeownership trend started to reverse in 2017: In 2017, millennials increased their share of the total homeowner population for the first time since 2009. 2017 was also the first year that the total number of millennial renter households declined, following years of slight but steady increase to around 15.2 million in 2016. Still, nearly 67% of all millennial households were renters in the final year of our analysis.
- Across All Generations, More Americans Are Renting: Between 2009 and 2017, the population of American households that pay rent has gone up by 15% to almost 43 million. In the same period, the number of homeowners increased by just 0.7% to 75.8 million. The declining trend in homeownership and increasing trend in renters combined to cause a steady drop in the ratio of owners to renters. While there were more than two homeowner households for every renter in 2009, that ratio fell to 1.76 by 2017.
- Single-Family Houses Becoming Popular Among Renters Too: American households have always preferred single-family homes by a vast majority, but a growing number appear to be renting rather than buying such homes. Besides supporting the idea that more U.S. households are choosing to rent in general, this trend suggests that people who need single-family houses — usually families — are becoming more likely to rent than buy.
ValuePenguin.com sourced data from the Census Bureau’s American Community Survey (ACS) to explore how renting and home buying have shifted across age groups and structures. Research analyst Chris Moon, who authored the study, looked at 5 year estimates from 2013-2017 for the purpose of this analysis.