Raising children no longer pushes new parents to get a mortgage
Renting families increase up to 73% in some areas.
Millennials waited longer than previous generations to enter the home-buying market, a phenomenon many experts blamed on low housing inventory, higher student loan debt and the younger generation’s decision to delay having a family.
But now, a new study from RENTCafé, which uses data from the U.S. Census Bureau, shows that even having children may not be as strong of a motivator to buy a home as it once was.
In an analysis of the 30 largest U.S. metros, the study found families with children have actually seen a decline in homeownership rates over the past several years.
In fact, not only is homeownership on the decline, but according to dual coverage in Bloomberg, big investors are doubling down on buying rental homes — a sure sign that demand is expected to stay strong.
According to this report, institutional investors bought more single-family rental homes in 2017 than in previous year, the first increase since 2013, according to data compiled by Amherst Holdings. One such investor procured $1 billion in investment capital to build a rental empire, another Bloomberg report shows.
The number of families with minor children who own their home decreased by nearly 3.6 million from 2006 to 2016, a decrease of 14%, the study showed. During that same time, the number of families with children living in rentals increased by 1.9 million, an increase of 16%.
But some areas saw increases that were significantly higher. In the Charlotte area, for example, renting families with children surged 73% from 2006 to 2016. And other areas such as Detroit, Riverside, Miami, Las Vegas and Los Angeles saw decreases as high as 20% in the number of homeowner families.
The study showed that prices are the main reason more families are turning to renting. Single-family home prices increased 75% faster than rent prices over the past five years, and in 29 of the 30 largest metros, home prices outpaced rents from 2013 to 2018.
But now, because of this shift, family-sized rental units, from apartments to single family homes, are in high demand. The study showed that more than 50% of all apartments built from 2006 to 2016 are family-sized units.
And now, while we’ve known that the rent may be too damn high for quite a while now, but a new report shows that rent has never been this high before. A newly released report shows nationwide rents just hit an all-time high, crossing the $1,400 mark for the first time ever.
Perhaps the tide will once again begin to turn, pushing families back toward homeownership? But for now, the big money says no.
Source: Housing Wire