Homeownership has long been considered part of the American dream, but renting remains a popular choice for many Americans. In recent years, the percentage of Americans who rent has hovered around one-third of all households. Understanding current rental trends can provide insight into the state of the housing market and the economy overall.
Key Statistics on Rental Housing
Here are some key statistics on rental housing in America:
- In 2021, 34.9% of American households rented their home. This equates to 44 million renter households. (Source: Joint Center for Housing Studies of Harvard University)
- The rental vacancy rate was 5.6% in 2021, down from 7% in 2020. This indicates high demand for rental housing. (Source: U.S. Census Bureau)
- The median monthly gross rent was $1,097 in 2021. Rents have been increasing faster than overall inflation. (Source: U.S. Census Bureau)
- About 22.3 million renters (over 50%) are considered rent-burdened, spending over 30% of their income on rent. 11.3 million spend over 50% on rent. (Source: Joint Center for Housing Studies)
Trends in Rental Rates Over Time
The percentage of Americans renting has fluctuated over the past several decades:
| Year | Percentage Renting |
|---|---|
| 1960 | 32.9% |
| 1970 | 34.6% |
| 1980 | 34.2% |
| 1990 | 33.8% |
| 2000 | 33.9% |
| 2010 | 33.4% |
| 2020 | 35.0% |
| 2021 | 34.9% |
The percentage of renters rose steadily from 1960 to 1970 as young baby boomers came of age and entered the housing market. It leveled off between 1970 and 2000. After the 2008 housing crisis, homeownership rates declined while more people turned to renting. The percentage of renters peaked in 2020 during the COVID-19 pandemic.
Renting by Age and Household Type
Younger households are more likely to rent than older households:
- 75% of households headed by someone under age 35 rent
- 58% of households age 35-44 rent
- 40% of households age 45-64 rent
- 25% of households age 65+ rent
Single person households also have high rental rates. In 2021, renters accounted for:
- 69% of single person households
- 37% of family households
Renting provides more flexibility for younger Americans who may move more frequently for jobs or relationships. Older Americans are more likely to be settled homeowners.
Factors Driving Rental Demand
Several economic factors influence rental demand:
Housing Affordability Challenges
High home prices and mortgage rates make buying a home unaffordable for many, especially in hot housing markets like California and New York. Renting is more accessible for those unable to buy.
Labor Mobility
Renting supports geographic mobility for work. Younger households move more frequently for career opportunities. Renting allows for relocation without selling a home.
Urbanization
More Americans are living in urban areas. Renting is more common in cities where less land is available for single-family homes. Urban rentals also promote density.
Delayed Marriage/Childbearing
The average age of first marriage and first child has risen. With major life events delayed, young adults rent longer before settling down as homeowners.
Conclusion
While homeownership remains an important goal for many, renting fills the needs of over one-third of American households. Younger households starting out, lower-income households, and those valuing flexibility often choose to rent. Rental demand should remain strong with housing affordability challenges, urbanization, and demographic shifts towards delaying major life milestones. Tracking rental rates provides insights into the overall housing market.