In the years prior to the housing crisis, it was the norm for a young family with children to have a home they could call their own, without needing to stress too much about the financial aspect of the situation. However, that is no longer the case. A new study published by apartment search website RENTCafe.com shows that fewer families are buying homes nowadays, compared to 10 years ago. The reason behind it is, of course, money. Due to this, the number of renters with children increased by 1.9 million (16%) in the past decade while that of homeowners with children decreased by 3.6 million (-14%).
The majority of large metros witness more families with children choosing to rent and not buy. Charlotte metro leads with a 73% increase in the number of families with minor kids who rent but the metro has also witnessed an increase of 21% in homeowners with kids. Atlanta metro comes in hot in its heels, with an increase of 51% in the number of renting families and recording a drop of 11% in homeowner families with kids. Third is Phoenix metro, with a 42% increase in families who rent and a 12% decrease in homeowner families.
Homeowner families with children in the metro areas of Detroit, Riverside, Miami, Las Vegas, and Los Angeles registered the highest decreases of over 20%. There were only 4 metros witnessing increases in the number of homeowners with kids: Charlotte (21%), Houston (5%), San Antonio (3%), and Dallas-Fort Worth (1%).
Looking at how home and rent prices increased in the past years, it seems that the median cost of a single-family home increased by 35% while rents increased by 20%. The area with the most striking difference in price changes is Detroit-Warren-Dearborn which witnessed a 155% increase in single-family home prices while rents went up by 12%. Another area worth mentioning is San Francisco-Oakland-Hayward where rents increased by 39% and single-family home prices by 80%. These markets and many others are following a similar trend, with home prices shooting up faster than rents. Other areas where single-family home prices increased considerably during the past 5 years are Las Vegas 74%, Portland 62%, Orlando 62%, Denver 61%, Tampa 60%, and Miami 60%.
Given the fact that home prices are increasing faster than rents, many families with children find renting the only viable option. This can only mean that there will be a higher demand for family-sized rentals (2 bedrooms or larger). In the last 10 years, single-family rentals increased by 3.6 million new units and the number of family-sized apartments went up by 1.1 million units.
Nationally, the apartments built between 2006 and 2016 were distributed as it follows: 52% were family-sized apartments, 41% were 2-bedroom apartments, 9% were 3-bedroom apartments and 2% had 4+ bedrooms.