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The Decade in Housing Trends: High-Earning Renters, High-End Apartments and Thriving Construction

This past decade has transformed the relationship between America and its housing, especially when it comes to renting. While the recession pushed many to rent out of necessity, the economic expansion which followed, coupled with changing attitudes towards family and homeownership, lead to the rise of the renter by choice. Rentership rates expanded across the board—from young families to seniors, from city cores to suburbs, many Americans have shifted away from homeownership.

Developers responded to the demand with a construction boom unseen since the 80s, which includes a growing number of high-end units. Meanwhile, apartment buildings themselves have become increasingly sophisticated, to accommodate quality-seeking lifestyle renters.

This past decade, the research team at RENTCafé continually analyzed housing trends and released several reports on major directions in renting. Now, as we have reached the end of these tumultuous but prolific ten years, we gathered the most significant insights discovered and updated them. Utilizing data from the U.S. Census Bureau, Yardi Matrix, PropertyShark, and the U.S. News & World Report we examined a number of economic and demographic indicators to get an overview of the housing trends that shaped the country in the past ten years.

I. The Decade in Housing Costs

1. The national average rent increased by 36% in the past decade
2. Home prices and rents rose in most of the nation’s largest cities

II. The Decade in Housing Trends

1. The number of American renters surpassed 100M this decade
2. The renter population grew twice as fast as the owner population
3. Renters became the majority population in 20 cities in the past decade
4. A majority of the cities with the largest share of renters are in the Northeast
5. More high-earning Americans are renting than ever
6. The number of homeowner families with children dropped significantly
7. Renting has increased in popularity among older households
8. An increasing number of renters are living the suburban life
9. Apartment living is still the most popular among renters
10. The nation’s priciest metros have been shrinking in population in the past decade
11. Millennials have left college towns for job hubs

III. The Decade in Construction Trends

1. Apartment construction thrived in the past decade
2. Apartments built in the past decade have been getting smaller

Methodology

1. The national average rent increased by 36% in the past decade

Since 2010, the national average rent increased by $390 or 36%, propelled by increasingly valuable land, progressively sophisticated apartments, and a booming job market that pushed demand skywards. The median home price went up by 31% in the same timeframe, while the median household income grew by 27%. Private college tuition fees were also on the rise—the price of higher education increased more than housing costs, shooting up by 39% in the past decade.

2. Home prices and rents rose in most of the nation’s largest cities

As expected, both the average rent and the median home price increased in large cities, as illustrated in a select list of cities below where we were able to obtain complete data for the decade. Home prices rose faster than rents in 15 of the cities below.

You can download data for all the 50 largest U.S. cities here.

1. The number of American renters surpassed 100M this decade

The renter population has become more than 100M strong after a decade of sustained growth. The number of Americans who rent reached 108.5M in 2018, up from 99.4M in 2010. At the same time, the share of renters now makes up 34% of the general population and is the largest it’s been since 1960, when 36% of Americans were tenants. By comparison, there were 202M homeowners in 2018, up from 189M in 2010.

Although the percentage of renters in the general population fluctuated throughout the years, its growth has been consistent since the 2000s. There are 74% more renters today than there were in 1960, with their numbers swelling by 46M since then.

2. The renter population grew twice as fast as the owner population

On a national level, renting shot up in popularity in the past decade. Since 2010, the number of renters increased two times faster (+9.1%) than the number of homeowners (+4.3%), signaling a considerable shift in the American lifestyle.


Overall, the share of renters went up by a full percentage point, from 33% to 34% of the U.S. population. And although only one-third of Americans are renters, 9.1M began renting in the past decade, considerably more than the 8.7M who purchased homes.

3. Renters became the majority population in 20 cities in the past decade

20 U.S. cities made the switch from a homeowner majority to a renter majority in the past ten years, pushing the share of renter-majority cities from 28% to 32%. In fact, renters now make up more than 50% of the population in 82 of the 260 cities we analyzed for this section.

California and Texas both saw three cities switch to a renter majority, the most out of any other states present in the ranking. However, Toledo, OH, posted the most significant gains in its renter segment, which went up by 23% in the past decade.

4. A majority of the cities with the largest share of renters are in the Northeast

Cities on the Northeastern coast have the highest concentration of renters in the country today—12 places from New York, New Jersey, Massachusetts, Virginia, Rhode Island and Connecticut made it to the top 20 cities with the highest shares of renters in 2018. Rapid job growth, continuously expanding local economies and increasing costs of living have all made their mark on the Northeast, contributing to the ever-increasing popularity of renting.

Renters make up 60% or more of the population in all the cities in the top 20, as renting is gradually overshadowing homeownership among the nation’s largest cities. Manhattan, the usual suspect in terms of exclusivity, took the lead with a 77% majority, followed by Newark, NJ (75%), and Hartford, CT (75%).

5. More high-earning Americans are renting than ever

Nationally, the number of households earning more than 150k per year who rent increased two times faster (+157%) than the number of high-earning homeowner households (+78%) since 2010, as progressively more wealthy Americans choose renting over homeownership.

An increasing number of Americans are renting as a lifestyle option—its easier to move neighborhoods or cities when you’re not tied down to a mortgage. However, since home prices upsurged in the nations’ priciest cities, lack of affordability also plays a role. While 150k translates differently depending on where you live, the number of high-earning renter households at least doubled in a significant 46 of the nation’s 50 largest cities. At the same time, five cities had a majority of renters earning over 150k a year in 2018, up from two in 2010.


Overall, more than half of the top 20 cities which registered the highest increases in wealthy renters saw the number of high-earning renters at least quadruple. Arlington, TX (x6.5) leads the ranking and is the only metro where the number of high-earning renters multiplied more than six times.

6. The number of homeowner families with children dropped significantly

Fewer and fewer American families are having children. The number of households made up of families with children has decreased by a noticeable 1.3M since 2010.

Changing attitudes towards child-rearing and affordability issues aren’t only impacting when Americans have children, but also where they live once they do. The decrease in families with children was significantly stronger in the homeowner segment—the number of families with children who own their homes dropped by more than 1 million in the past decade (-5.6%), while the number of renting families with children stagnated (-0.5%).

7. Renting has increased in popularity among older households

The number of aging renter households (60+) went up by 32% in the past decade, while that of aging homeowner households went up by 23%. At the same time, the number of renters under the age of 34 and in the 35 to 59 segments both increased by only 3% and 7%, respectively, while the number of homeowners in these age groups has decreased over the years.


In 15 of the top 20 cities which added the most aging renters, the number of over 60 renter households increased by at least a half. Texas dominates the ranking, with six cities in the top 20. However, Raleigh, NC, leads the way after a whopping 88% increase, followed by Jacksonville, FL (+82%), and Austin, TX (+71%).

8. An increasing number of renters are living the suburban life

Suburbs added renters at a faster pace (+17%) compared to cities (+14%) in the past decade. Since the suburbs come with less crowded neighborhoods, good schools, and cheaper, larger, and more sophisticated homes, an increasing number of renters are settling into the suburban life.

In 40 out of the 50 largest metro areas, the number of suburban renter households grew faster than the number of urban ones in the past decade. At the same time, suburban areas saw more significant net numbers of renter households choose them over city cores in 22 of the metros we analyzed.


Texas is yet again the state with the most metros in the ranking—Austin, Dallas-Fort Worth, San Antonio, and Houston all made it to the top 20 metros where the suburban renter population grew the fastest. Austin took first place by a wide margin, after a 41% increase in the past decade. Phoenix, AZ (+32%), follows, with Raleigh, NC (+30%), in tow.

9. Apartment living is still the most popular among renters

In the past decade, the number of American households renting apartments increased by 10.8%, a slight 0.2% more than renters living in single-family units. Today, almost two-thirds of renters live in multi-family units.

Overall, while growth was stronger in the single-family sector immediately after the recession, fewer renters began opting for single-family units as the economy stabilized and started expanding. Growth in the multi-family sector was consistent, except for a -1% drop in 2016.


California has the most cities in the top 20 with the highest increases in the percentage of apartment renters, with five present on the list, while Texas dominates the single-family ranking, with 6. Henderson, NV, is at the top of the multi-family ranking, after a 12% increase in the share of apartment renters, while Edison, NJ, leads the single-family ranking, with its renter segment shooting up by 41%.

10. The nation’s priciest metros have been shrinking in population in the past decade


The nation’s most expensive metros have lost residents in the past decade, who mostly relocated to more affordable nearby cities. For example, New York lost the most residents in the past decade (-216k), with the highest share moving to Philadelphia (30k). At the same time, Phoenix saw the most significant migration boom (42k), mostly from Los Angeles (12k).

Florida dominates the top 20 metros with the highest migration, with six present in the ranking, followed by Texas, with four. At the same time, Californian places lost the most residents, with 4 metros in the ranking.

11. Millennials have left college towns for job hubs

Most of the millennial population entered the job market this decade, and as the second-largest generation in American history—recently dethroned by Gen Z—they’ve made an impact on the cities they studied and now work in. If in 2010, the first ten cities with the highest share of millennials were college towns, in 2018, they had been replaced by job hubs.

Cambridge is the exception to the rule. The home of Harvard and MIT came in 10th in 2010 but climbed to the top of the ranking in 2018. The rapid growth the city is experiencing explains the trend, as more and more high-technology employers have been fueling its job market.

1. Apartment construction thrived in the past decade

2.4M units were delivered this decade, in a construction boom unseen since the 80s. On the one hand, the upsurge in construction was fueled by demand coming from the increasing number of Americans who rent. On the other hand, millennials, one of the largest generations in U.S. history, began living independently in droves in the past decade, requiring more apartments than generations before them.

High-quality apartments with an array of resort-style amenities went mainstream this decade. At the very top of the quality scale, rental units located in Class A+ and Class A buildings represent 40% of the 2.4M built this decade. This is the first time we see such a substantial demand for and supply of high-end apartments. As a significant number of Americans are now renting by choice, developers are catering to their needs: sleek apartments, buildings with more amenities than ever and even community-building spaces for resident networking events.


Texas again overshadowed the rest of the U.S., with four metros in the top 20 metros which build the most apartments in the past decade. Out of these, two metros dominate the podium—Dallas-Fort Worth and its 149k units came in first, while Houston took third place with 114k apartments.

2. Apartments built in the past decade have been getting smaller


On a national level, the average size of newly built apartments decreased by 57 SqFt or the size of a medium bathroom in the past ten years. 2017 marks the only year in the past decade when completed apartments were larger than the year before, with the average size expanding by a slight 0.1% (or 1 SqFt).

The average size decreased between 9% and 21% among the top 20 cities where apartments shrunk the most in the past decade. Except for Orlando, FL, and Jacksonville, FL, both of which saw the average apartment size drop by 9%, apartments shrunk by 10% or more in all the cities in the ranking. With -21%, Detroit, MI, leads the top 20 and is the only city on the list where apartments decreased in size by 20% or more.


The same 10 U.S cities had the smallest apartments both in the beginning and at the end of the decade, except for Portland, OR. Seattle had the least sizeable apartments in 2010 and in 2019 as well, followed by Newark.

Though the size of apartments hasn’t changed in Marietta, GA, it continued its reign as the city with the nation’s largest apartments.

Methodology

  • The data used in this report, data was sourced from our sister companies Yardi Matrix (rent) and PropertyShark (home prices), from the U.S. Census Bureau (income and demographics), and the U.S. News and World Report (tuition).
  • In cases where 2019 data was not available, 2019 values were calculated based on CPI-adjusted 2018 values and were noted as such.
  • Numbers were subject to rounding.
  • Methodologies and limitations were set for each section, depending on the scope of the research. All data sources and research methods are listed per section, below.

The Decade in Housing Costs

Sections 1-2

  • Rent data was provided by our sister division Yardi Matrix, a business development and asset management tool for brokers, sponsors, banks and equity sources underwriting investments in the multifamily, office, industrial and self-storage sectors. The data on average rents comes directly from competitively-rented (market-rate) large-scale multifamily properties (50+ units in size), via telephone survey.
  • Median sale price values were provided by PropertyShark and cover residential transactions for condo, co-ops, and single- and two-family homes closed in 2010 and 2018, respectively. Home sale prices for 2019 were in some cases calculated using the CPI-adjusted value for 2018. Cities with insufficient data were excluded.
  • Median household income source: U.S. Census Bureau ACS 1-year estimates. The 2019 median household income is based on CPI-adjusted data from 2018.
  • College tuition data was sourced from the U.S. News & World Report.
  • We analyzed the top 50 largest U.S. cities by population. The table displayed in the report includes a select list of cities with available data for the entire decade for the data points presented.
Show full methodology

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About the author

Irina Lupa

Irina Lupa is a creative writer for RENTCafé, where she covers market trends and topics relevant to today’s renters. Before developing a passion for real estate, she focused on fields ranging from automotive electronics to digital business development, digging into tech news from a critical perspective. Irina holds a B.S. in Journalism and Mass Communication. You can connect with Irina via email.

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