The Dream on Hold: 3.6 Million Fewer Families with Kids Own a Home Compared to 10 Years Prior
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The big fallout during the housing crisis followed by air-tight lending rules, an alarming shortage of entry-level homes, and skyrocketing home prices are the main items on a long list of reasons why the homeownership vs renting balance tilts toward the latter. The number of families with minor children who own their home has decreased by almost 3.6 million in one decade (2006-2016), while the number of families with children living in rentals has increased by 1.9 million over the same period of time, according to U.S. Census Bureau estimates.
As of 2016 (the most current Census estimates), 14.3 million households with minor children rent in the U.S. (up from 12.4 million in 2006), representing 33% of all renter households. By comparison, there are 22.1 million families with minor children that own their home (down from 25.7 million in 2006), representing 29% of owner households.
In the big scheme of things, 10 years is just a blip on the radar. These statistics show the tremendous effects of this relatively short but eventful period of time on American families. These 3.6 million fewer owner households are families who lost their homes in foreclosures or otherwise, they are young families who are unable to overcome the current financial barriers to become homeowners, and they are also homeowners whose children grew up and no longer fall into this category. Additionally, there are other contributing factors. The birthrate in the U.S. is declining, people are having children later in life, and the cost of raising a child has soared.
In the 10-year period between 2006 and 2016, renters with children in the U.S. have increased by 16%, while homeownership has decreased by 14% for the same demographic. The rise of renting and the decline of ownership among families with children is not only confirmed in all 30 largest U.S. metropolitan areas, but it’s also very prominent in many of them.
Homeowners vs renters: Most large metros see a surge in renting families with children and a drop in homeowner families
Using U.S. Census data, we analyzed the changes that occurred between 2006 and 2016 in the number of renter and owner households with minor children in each of the nation’s 30 largest metropolitan areas. This approach provides a more complete picture of the type of housing in which American families with kids reside, regardless of whether they choose to live in the city or in the suburbs.
One of the things that stood out in our research was the fact that the highest jumps in renting families happened in Southern metropolitan areas: Charlotte, Atlanta, Phoenix, Houston, and Miami. At the top of the list is the Greater Charlotte Area in North Carolina, with a 73% surge in families with kids who rent their home, and an increase of 21% in homeowner families with kids. Second is Atlanta metro, which saw a 51% jump in the number of renter families and an 11% drop in homeowner families. The third on the list is Phoenix metro, where renting families increased by 42% while those who own their home decreased by 12%.
On the flip side, the smallest changes in renter families were in Pittsburgh metro, where the number of renter-occupied households with children stagnated over the 10-year period, while the number of owner families went down by 13%. In Los Angeles–Long Beach–Anaheim metro there was a modest 5% rise in renter families and a big 22% dip in owner families. In New York metro, the number of renter families increased by 8% and the number of owner families decreased by 13%.
The metro areas of Detroit, Riverside, Miami, Las Vegas, and Los Angeles lost the most homeowner families with children, registering decreases of more than 20%. Only 4 metro areas saw increases in the number of homeowners with children: Charlotte 21%, Houston 5%, San Antonio 3%, and Dallas-Fort Worth 1%, but still lower than the increases in their renter counterparts.
In terms of numerical changes, Houston metro saw the largest increase in renter families with children among the 30 largest metros, 107,000 households, while Los Angeles metro saw the largest decrease in homeowner families with children, 188,000 households. For specific numerical and percentage changes, look up metro areas in the table below and find out what’s the situation of homeowners vs renters in cities from Washington, DC, to Minneapolis, MN, and more:
Changes in the Number of Households with Minor Children and Real Estate Prices in the 30 Largest U.S. Metros
| Metro/Market | Net change in owners with children | Net change in renters with children | % change in owners with children | % change in renters with children | % change in single-family home prices (5-year) | % change in rent prices (5-year) |
|---|---|---|---|---|---|---|
| Charlotte | 33,000 | 48,000 | 21% | 73% | 43% | 30% |
| Atlanta | -54,000 | 98,000 | -11% | 51% | 57% | 40% |
| Phoenix | -40,000 | 70,000 | -12% | 42% | 45% | 39% |
| Houston | 28,000 | 107,000 | 5% | 41% | 30% | 25% |
| Minneapolis | -29,000 | 33,000 | -8% | 40% | 48% | 14% |
| Miami | -97,000 | 88,000 | -23% | 40% | 60% | 33% |
| Washington, D.C. | -7,000 | 72,000 | -1% | 38% | 11% | 11% |
| Orlando | -21,000 | 34,000 | -12% | 36% | 62% | 37% |
| Dallas-Fort Worth | 4,000 | 101,000 | 1% | 36% | 45% | 31% |
| Tampa | -38,000 | 33,000 | -18% | 33% | 60% | 34% |
| San Antonio | 6,000 | 28,000 | 3% | 33% | 29% | 20% |
| San Francisco | -31,000 | 57,000 | -10% | 33% | 80% | 39% |
| Seattle | -6,000 | 40,000 | -2% | 31% | 79% | 45% |
| Las Vegas | -31,000 | 29,000 | -22% | 30% | 74% | 31% |
| Riverside | -92,000 | 57,000 | -24% | 29% | 52% | 19% |
| Denver | -5,000 | 25,000 | -2% | 27% | 61% | 45% |
| Sacramento | -30,000 | 25,000 | -17% | 26% | 58% | 46% |
| San Diego | -32,000 | 34,000 | -15% | 21% | 42% | 34% |
| Philadelphia | -92,000 | 31,000 | -17% | 17% | 51% | 17% |
| Boston | -34,000 | 25,000 | -9% | 16% | 33% | 26% |
| Detroit | -113,000 | 23,000 | -26% | 16% | 155% | 12% |
| Kansas City | -23,000 | 13,000 | -12% | 16% | 43% | 24% |
| National (U.S.) | -3,566,000 | 1,929,000 | -14% | 16% | 35% | 20% |
| Cincinnati | -27,000 | 12,000 | -13% | 15% | 36% | 11% |
| Baltimore | -30,000 | 15,000 | -12% | 15% | 16% | 14% |
| Portland | -6,000 | 12,000 | -3% | 13% | 62% | 43% |
| St. Louis | -48,000 | 11,000 | -17% | 11% | 24% | 18% |
| Chicago | -157,000 | 32,000 | -18% | 9% | 49% | 23% |
| New York | -176,000 | 79,000 | -13% | 8% | 38% | -3% |
| Los Angeles | -188,000 | 37,000 | -22% | 5% | 52% | 36% |
| Pittsburgh | -26,000 | 1,000 | -13% | 0% | 15% | 10% |
*5-Year Changes in Average Rent Prices April 2013 - April 2018 (Yardi Matrix)
*5-Year Changes in Median Single-Family Home Sale Price April 2013 - April 2018 (Redfin)
Single-family home prices increased 75% faster than rents in the last 5 years
At the confluence of forces that prevent families from buying homes and compel them to rent, the cost of housing is probably the strongest force. Which is why next we looked at how much the price of single-family homes for sale and the price of rent have changed in the last few years. According to data provided by Redfin, a national real estate brokerage, the national median price of a single-family home has increased by 35% in the past 5 years, 75% faster than rents. During the exact same period of time, the national average rent has increased by 20%, according to data provided by our sister division Yardi Matrix, an apartment intelligence provider.
As evidenced in the last 2 columns in the table above, in 29 of the 30 largest metros the prices of single-family homes have outpaced rents between 2013 and 2018. The widest difference in price changes homeowner vs renter is the Detroit-Warren-Dearborn area, where single-family home prices went up 155% and rents only 12%. In the notoriously expensive San Francisco-Oakland-Hayward area rents went up by 39% in 5 years, while single-family home prices shot up twice as fast, by 80%, according to Redfin data. Housing in Seattle-Tacoma-Bellevue followed a similar path, 79% up for single-family home prices and 45% up for rents. Many other markets saw a spectacular rebound in prices for single-family houses in the past 5 years: Las Vegas 74%, Portland 62%, Orlando 62%, Denver 61%, Tampa 60%, and Miami 60%, making it extremely difficult for families with children to keep up with this pace.
With fewer families with children buying homes, demand for family-sized rental housing is high
As the price to purchase a single-family home is going up fast, and new home construction is plugging along slowly, families with children are looking elsewhere for housing options. For those wondering which side to take in the homeowners vs renters dilemma, one increasingly popular option is renting a house. Single-family rentals are in high demand among various demographics, including families with kids, and they have increased in number by 3.6 million units in one decade. The multifamily industry is also doing a pretty good job of keeping up with the increased demand for larger-sized apartments. The number of family-sized apartments (with 2 bedrooms or more) increased by more 1.1 million new units since 2006 in large-scale buildings (50 units or more) alone. Add to these numbers rental apartments located in smaller-sized buildings, and you have what looks like a generous stock of rental housing available for families.
Yardi Matrix apartment data shows that nationally more than half (52%) of the apartments built between 2006 and 2016 are family-sized (2 bedrooms or larger). 41% are 2-bedroom apartments, 9% are 3-bedroom apartments and 2% have 4 bedrooms or more. Metropolitan Miami, Phoenix, Riverside, Charlotte, Orlando, and San Diego — which have some of the highest net gains in renter households with kids in the country — are building over 54% of the new apartments as 2-bedroom units or larger. Generally, the metro areas that saw the largest numerical increases in renter families with children have built a fair share of family-sized apartments.
Apartment construction by number of bedrooms in the 30 largest metros (2006-2016)
| Metro/Market | Studios | 1 bedroom | 2 bedrooms | 3 bedrooms | 4 bedrooms | Family-sized apts. (2,3,4 beds) |
|---|---|---|---|---|---|---|
| Riverside | 0% | 36% | 48% | 14% | 2% | 64% |
| Detroit | 1% | 35% | 43% | 16% | 5% | 64% |
| Orlando | 2% | 35% | 46% | 14% | 4% | 63% |
| Tampa | 2% | 36% | 46% | 13% | 3% | 62% |
| Miami | 1% | 37% | 45% | 15% | 1% | 62% |
| Cincinnati | 1% | 39% | 45% | 9% | 6% | 60% |
| San Diego | 8% | 33% | 43% | 14% | 2% | 59% |
| Las Vegas | 2% | 39% | 50% | 9% | 0% | 59% |
| Phoenix | 3% | 42% | 44% | 9% | 2% | 55% |
| Sacramento | 6% | 39% | 38% | 14% | 3% | 55% |
| Charlotte | 3% | 43% | 43% | 9% | 2% | 54% |
| National (U.S.) | 5% | 43% | 41% | 9% | 2% | 52% |
| St. Louis | 5% | 43% | 43% | 7% | 1% | 52% |
| San Antonio | 3% | 47% | 39% | 10% | 3% | 51% |
| Kansas City | 4% | 46% | 41% | 9% | 1% | 51% |
| Baltimore | 4% | 46% | 43% | 6% | 1% | 50% |
| Pittsburgh | 6% | 44% | 38% | 9% | 4% | 50% |
| Atlanta | 3% | 48% | 41% | 6% | 2% | 49% |
| Philadelphia | 5% | 48% | 39% | 6% | 3% | 48% |
| Boston | 7% | 47% | 42% | 4% | 1% | 47% |
| Houston | 2% | 54% | 38% | 6% | 1% | 45% |
| Los Angeles | 11% | 45% | 37% | 7% | 1% | 44% |
| Denver | 4% | 52% | 37% | 5% | 1% | 44% |
| San Francisco | 11% | 46% | 33% | 9% | 1% | 43% |
| Minneapolis | 8% | 49% | 34% | 6% | 2% | 43% |
| Washington | 6% | 52% | 38% | 4% | 1% | 42% |
| Dallas-Fort Worth | 2% | 56% | 35% | 5% | 1% | 42% |
| New York | 11% | 47% | 36% | 5% | 0% | 42% |
| Portland | 14% | 45% | 33% | 7% | 1% | 41% |
| Chicago | 13% | 53% | 28% | 5% | 1% | 34% |
| Seattle | 17% | 53% | 25% | 4% | 1% | 30% |
Methodology
Demographics data and terminology source: U.S. Census Bureau, American Community Survey – 2006 and 2016 1-year estimates. The changes in the number of households represent estimates of numerical and percentage increases or decreases from 2006 to 2016. Numbers may be rounded to the nearest hundred or the nearest thousand.
Single-family home sale price source: Redfin, a national real estate brokerage. Home price data represents the percentage increase or decrease in the median single-family home sale price from April 2013 to April 2018. Redfin’s defined metro areas may not be geographically identical to U.S. Census metropolitan areas (MSA – metropolitan statistical area are defined as per Census Bureau’s MAF/TIGER database).
Rent price source: Yardi Matrix, a Yardi apartment information service. Rent data represents the percentage increase or decrease in the average rent price in apartment buildings of 50 or more rental units from April 2013 to April 2018. Yardi Matrix markets may not be geographically identical to U.S. Census metropolitan areas (MSA – metropolitan statistical area are defined as per Census Bureau’s MAF/TIGER database).
A rental or rental unit is defined as a renter-occupied housing unit. Renter households or families with minor children are renter-occupied housing units with related children of the householder under the age of 18. Owner households or families with minor children are owner-occupied housing units with related children of the householder under 18.
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Nadia Balint is a senior creative writer for RENTCafé. She covers news and trends in residential and commercial real estate and their impact on our everyday life, including rental housing, for-sale housing, real estate development, homeownership, market reports, insurance, landlord-tenant laws, personal finance, urban development, economy, sustainability, and social issues. Nadia holds a B.S. in Business Management from Northeastern Illinois University in Chicago. You can connect with Nadia via email.
Nadia’s work and expertise have been quoted by major national and local media outlets, including CNN, CNBC, CBS News, Curbed, The NY Post, The Chicago Tribune, The Denver Post as well as industry publications, such as GlobeSt, Bisnow, Inman News, Multifamily Executive, and The Commercial Real Estate Show. Nadia also wrote for Multi-Housing News, Commercial Property Executive, HubSpot, and more. Prior to entering the real estate industry, Nadia worked in the legal field, where she gained over 10 years of experience in business, corporate, and real estate law.
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