After the financial crisis hobbled the housing industry back in 2008, the number of rented abodes skyrocketed. Today, that number continues to climb, as more people opt—for one reason or another—to live the leasing lifestyle, according to the Terner Center for Housing Innovation at the University of California, Berkeley, which conducted a national survey of single-family renters to better weigh their experiences and motivations.
Between 2006 and 2016, more than 3.8 million additional households became single-family renters, the center notes. By the time 2015 rolled around, nearly one in five single-family homes was occupied by a renter, and today, single-family rentals make up the fastest-growing portion of the housing market, the Terner Center says.
To tease out the qualitative factors behind their choice to rent a home, the Terner Center analyzed why a growing number of renters are choosing to reside in single-family rental properties. What researchers found is this: the reason households often opt to rent is completely unrelated to the housing stock itself.
Nearly two-thirds of respondents were already renters before relocating into their current digs—35.8 percent rented single-family homes while 30 percent had been living in multifamily units. Some 42.9 percent said they were renting because it was more affordable and convenient, offered more flexibility, and/or provided them access to a nicer neighborhood. Almost one in five survey takers said they had no desire to own a home in the future.
Another data point: People rent single-family homes for their size and amenities (“private laundry,” no shared walls with neighbors, space for pets, etc.) and because of the benefits inherent to single-family neighborhoods. Only one out of 190 said they’d prefer to reside in a multifamily dwelling instead.
Popularity notwithstanding, the American homeownership dream is still alive and well: 80 percent of single-family renters said they desire to purchase a place of their own within the next five years, the study says. Among those, almost one-third said their decision stems from a desire to shield themselves from rent increases and/or evictions.
“The study illuminates that many of these renters are interested in homeownership, but the tightened credit box in the wake of the financial crisis has made it more difficult for renters—even among those with higher incomes—to qualify for a mortgage,” the study reports. “While there are numerous factors that have contributed to this tightening of lending standards, it is critical that policymakers working to revamp the housing finance system consider questions of access.”