This story was originally published in Builder.
There were more renters in 2016 than in 2006 in each of the 50 largest U.S. cities, according to a new Zillow analysis. In 2006, 31 percent of all U.S. households rented; today, more than 36 percent of all households rent. In 2000, prior to the housing boom, about 33 percent of all households were renter households.
Memphis, Tenn.; Las Vega; and Honolulu reported the greatest increase in renters since 2006.
In Memphis, 56 percent of all households are renter households, up 11 percentage points since 2006. The renter rate in Las Vegas is just over 47 percent, up from 38 percent 10 years prior.
Home values across the country are rising more than 8 percent annually, with some markets reporting double-digit home-value appreciation. The median home value in the San Jose, Calif., metro rose 27 percent over the past year, with 43 percent of all households renting, up about 5 percentage points since 2006.
"The share of U.S. households that rent surged in the wake of the Great Recession, as millions of families were foreclosed upon and younger adults either chose to or had no choice but to rent for longer," said Zillow senior economist Aaron Terrazas. "Renting remains more common years after the recession ended and after a historically long national economic expansion. Some of this shift is attributable to lifestyle choices, including young adults delaying marriage and starting families, and a strong preference for living in urban cores where renting is often more convenient and financially feasible. Some is also driven by economic necessity—quickly rising home values can make it difficult for some to enter the market to begin with—and many previously foreclosed-upon families remain unable to purchase again, even years after foreclosure. The homeownership rate is slowly rising—the most recent data show a sharp surge in young adult homeownership over the past two years—but it will likely take many years, if ever, for it to get back to its lofty pre-recession peaks."
The majority of people rent instead of own in 29 of the 50 largest U.S. cities. In 2006, only 16 of the 50 largest cities were majority renter households.
Miami, New York, and Boston have the greatest share of renter households. Almost 70 percent of all households in Miami and New York, and 65 percent of all households in Boston, rent. The renter rate in Miami rose 6 percentage points over the past 10 years.
Virginia Beach, Va.; Albuquerque, N.M.; and Mesa, Ariz., have the smallest share of households who rent. The renter rate in Virginia Beach is 37.8 percent, and is about 40 percent in Mesa.
The median rent across the U.S. is $1,440 per month, up 1.3 percent over the past year. According to the 2017 Zillow Group Consumer Housing Trends Report, Millennials say one of the greatest barriers to homeownership is saving enough money for a down payment. Other struggles include qualifying for a loan and determining how much home they could afford.
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