Highlights:
- The U.S. renter population sank to 107 million in 2019, after a mid-decade peak of 111 million.
- Despite the national decline, renting rose in the nation’s largest urban areas, gaining majority in 23 cities in the past decade.
- 45 million Gen Z’s will be of prime renting age (20-29 years old) by 2025, a majority of whom are likely to be renters.
The housing crisis of 2008 and the great recession caused many Americans to lose their homes to foreclosure or postpone their homebuying plans altogether. This led to a massive boost in renting in the early years of the 2010-2019 decade — with the number of renters peaking at 111 million — as well as a drop in homeownership, which bottomed out at 200 million. The direction reversed in the second half of the decade and, as the economy recovered, rentership entered a downward trend, hitting 107 million renters in 2019. Meanwhile, homeownership rebounded to almost 213 million at the close of the decade, according to U.S. Census data released in September 2020.
Furthermore, as the main trendsetters of the decade, Millennials introduced a new concept in renting that defined the 2010s — the “renter by choice,” which is a renter who prefers a flexible, higher-quality, urban lifestyle. As many Millennials show a preference for the big city life, renting made significant gains in the nation’s large and mid-sized cities (with populations greater than 100,000). Nationally, 23 such cities gained a renter-majority last decade, despite the recent national decline. By comparison, owners became the majority in only 12 of the cities analyzed in the same timeframe.
Looking forward, an estimated 45 million Gen Z-ers will have entered the housing market by 2025, most of whom will likely rent. And, if the current behavior patterns of young Millennials and adult Gen Z-ers continue, the renting lifestyle is poised to regain some ground in the next decade and maintain a solid footing in urban areas.
Renting made significant gains in the past ten years but dipped in the latter half of the decade
The renter population grew by 8 million in the last decade, and is now 107 million strong. Specifically, renters currently make up 33.6% of the U.S. population — up from 33% in 2010. However, the latest numbers are far from the 2015 peak in renting, when 111 million Americans rented their homes for a 35.5% share. In fact, the number of renters reached a seven-year low at the end of the decade.
Meanwhile, the owner population grew by almost 11 million in the past 10 years. After a three-year dip early in the decade, the number of homeowners rose to an all-time high of 212.7 million, or 66.4% of all Americans. Still, the share of homeowners is smaller than it was at the beginning of the decade, when they made up 67% of the population.
The number of renters entered a downward trend while ownership has been slowly rebounding
The start of the decade saw a sharp rise in the number of renters, which climbed by a whopping 3.4% in 2010 and continued to increase by more than 3% until 2012. However, by the time renting peaked in 2015, the growth rate had slowed to 0.9%. 2016 marked the first year since 2004 that the number of renters dipped — by a slight 0.1%. Since then, the renter population has been on a downward trend, decreasing by 1% in 2019.
At the same time, the number of owners declined in the first three years of the decade, but has been steadily rising since then. Since 2013 (when the owner population expanded by a modest 0.1%), the number of homeowners has been on an upward trend, reaching a 1% growth rate in 2019. In 2017, the number of homeowners registered an unusual spike, increasing by 2.3%. Notably, the number of renters decreased by 2% that same year, as higher consumer confidence, a robust economy and low mortgage rates gave more Americans the opportunity to become homeowners.
Renters took over 23 cities in the past decade, including Seattle and Pittsburgh
However, renting was still the decade’s winner among the nation’s large and mid-sized cities. Despite the recent downward trend, 23 cities with more than 100,000 residents transitioned from an owner to a renter majority in the last 10 years. This trend can be seen in a diverse set of cities, from established job hubs such as Seattle, where innovative companies making use of Seattle office space drive local employment, to up-and-comers like Boulder, Colo.
Waterbury, Conn., saw the most dramatic change in the structure of its population. Renters here now make up 60.9% of the brass city’s residents, compared to 48.8% at the beginning of the decade. Similarly, with a 59.2% share of renters, Springfield, Mo., also reached a substantial renter majority, up from 48.4% in 2010. Fayetteville, N.C., earned the third-highest renter share in the ranking at 56.5%.
Chicago, Sacramento and Reno are among the 12 new owner-majority cities
In the past decade, the share of homeowners surpassed that of renters in 12 cities we analyzed — about half the amount where renters are the majority. And, in a surprising turn, some of them are major job hubs, whereas ownership usually has a strong presence in suburban areas and smaller cities. Specifically, Baltimore, Chicago and Sacramento, Calif., have transitioned to an owner majority since 2010.
Notably, Kent, Wash., reached the highest ownership share of the 12 cities with 57.9%, following an 8.2% surge in its homeowner segment. Likewise, Sandy Springs, Ga., now has an impressive 54.6% share of owners, while Oxnard, Calif., comes in third with a 53.3% homeowner share.
Almost half of the cities with the fastest growing share of renters are from Texas
The South and Southwest take the lead when it comes to the cities that saw the greatest increases in their renter shares. In fact, four of the top 10 cities with the highest renter share changes are Texas cities that exploded in the past decade: Dallas-area stars Frisco, Plano and McKinney, along with Houston’s fastest-growing planned community, The Woodlands.
In the last 10 years, the share of renters increased the fastest in Frisco, Texas, by a massive 59%. Its neighbor to the south Plano came in next after a 41% surge in its share of renters, while Hampton, Va., took the third spot in the ranking with a 31% increase.
The fastest ownership gains pale in comparison to renting increases
The share of renters skyrocketed by up to 59% and mostly in cities with a renter minority. However, when it comes to ownership, the gains were much smaller and more often in cities that already had a homeowner majority. The fastest rise in the share of owners, 27%, is only slightly higher than the 10th-largest renter share increase, 24%. The prevalence of ownership in smaller areas tends to explain the trend, as ownership made most of its gains by consolidating its presence in these types of cities.
Hartford, Conn., took the lead with a 27% increase in its owner share. Not far behind, Rhode Island capital, Providence, registered the second-fastest increase, 17%, while Kent, Wash. — which transitioned to an owner majority this decade — came in third (16%).
45 million Gen Z-ers will enter the housing market by 2025
As to future of the rental market, Gen Z-ers will certainly make a splash in the coming years — both in numbers and new preferences. While many are still minors, a large share of the generation is now entering adulthood, and the oldest are already finishing college and joining the workforce. As of 2019, 21.5 million were in the 20-24 age group (the oldest of this generation being 24). By 2025, a projected total of 45 million Gen Z-ers will be of peak renting age (20-29) — doubling in number. Although many may still live with their parents if economic conditions are unfavorable, a large share of this cohort will be the renters of the next decade.
Just as Millennials spearheaded the rise of the renter-by-choice, Generation Z will likely alter renting trends with their approach to technology. For instance, 62% find technology very or extremely important — more than any other generation — according to a recent renting preferences survey. Plus, as the first digital natives, Gen Z-ers also consider smart home technology and high-speed internet as basic amenities. Gen Z is also the most research-focused generation and more careful than their counterparts when it comes to the quality of apartments and property reviews.
Overall, the housing trends of the past decade suggest that renting is maintaining its popularity in the nation’s large and mid-sized cities, while homeownership has and will continue to rebound. But, with Gen Z entering adulthood and Millennials settling down, the coming decade will likely see more shifts in the housing landscape.
Methodology:
- RentCafe.com is a nationwide apartment search website that enables renters to easily find apartments and houses for rent throughout the United States.
- All data in this study is sourced from the U.S. Census Bureau’s ACS one-year estimates for the 2010-2019 period. 2025 data is a projected estimate.
- We analyzed all cities with populations greater than 100,000; 314 cities were eligible for the ranking.
- The city rankings were compiled by comparing the number of people living in renter- and owner-occupied units in 2010 and 2019.
