Phoenix, AZ Real Estate News Rental Market

Single-Family Rentals Increased Faster than Apartments in 22 of 30 Big Cities, Led by Phoenix

The U.S. housing market has gone through nothing short of a transformation in the last decade. The number of people renting their abode has increased significantly, in some cities surpassing the number of homeowners. The housing market quickly responded to this shift by adding millions of rental units in just a few years, with many U.S. cities witnessing a frenzy of apartment construction.

The most interesting part of this transformation, however, was the fact that the rental market expanded even faster horizontally than it did vertically. For the better part of the decade ending in 2016, single-family homes for rent were the fastest growing type of rental in the U.S., outpacing the formidable apartment boom seen throughout the country.

According to U.S. Census estimates, the number of single-family rentals (SFR) in the U.S. grew by 31% in the ten year period immediately following the housing crisis (2007 to 2016), while multifamily rentals (MFR) grew by 14%. In net numbers, single-family rentals in the U.S. increased by 3.6 million units in ten years, more than rental apartments, which increased by 3.2 million units. As of 2016, the U.S. Census counted a total of over 15 million single-family homes for rent in the United States and a total of over 26 million apartments for rent.

RentCafe Single Family Rentals versus Apartments in the US

The main trigger for this wave of single-family homes turning into rental homes was the housing crash of the late 2000’s. Many single-family homes with “underwater” mortgages were swept up by a few institutional investors during the crisis and turned into rentals. However, a much larger number of small investors became landlords during that period of time. According to a recent Urban Institute study, most single-family rentals in the U.S. are owned by individual investors. Of the 15+ million single-family rentals currently on the market, only 2% are owned by large investment firms, and about 45% belong to landlords who own just one unit.

Phoenix leads with the fastest growth and the largest gain in single-family rentals

Although they’re more common in suburban settings, single-family rentals have been incredibly prolific in most of the nation’s biggest urban centers. When we looked at increases in the number of renter-occupied households by type, we found that in 22 of the 30 largest U.S. cities single-family rentals expanded faster than apartments between 2007 and 2016.

With some of the largest numbers of foreclosures and sharpest drops in home values during the housing bust, the city of Phoenix tops the list of cities with the biggest percentage increase in single-family rentals. According to U.S. Census estimates, the number of houses for rent in Phoenix increased by a whopping 77% (from 56,900 in 2007 to 100,800 in 2016). Phoenix saw about 44,000 single-family homes turn into rentals during this 10-year period, the largest gain among the 30 cities analyzed.

Boston had the second-fastest increase in single-family homes for rent, 63%, versus a 20% increase in apartments. However, the number of single-family rentals in Boston is much smaller than in Phoenix, going from about 8,200 SFR in 2007 to 13,400 in 2016, as Boston was less impacted by foreclosures and price depreciation.

Fort Worth saw an increase of 60% in single-family rentals, the third fastest among the 30 largest cities, compared to a 17% increase in apartments. Prompted by the housing downturn, the number of SFR in Fort Worth rose from 33,400 in 2007 to 53,400 in 2016. Although it isn’t one of the largest markets for single-family rentals, Ft. Worth witnessed a significant increase during that time period. Rounding up the top 5 are Austin and Charlotte, each with a 55% increase in SFR. In Austin, there were 50,500 single-family dwellings for rent in 2016, 17,900 more than in 2007. In Charlotte, there were 51,400 SFR in 2016, 18,200 more than 10 years prior.

Also on the list of 22 cities where single-family rentals increased at a faster rate than apartments are El Paso, Indianapolis, Nashville, Las Vegas, Chicago, Memphis, Houston, Denver, Louisville, Columbus, Jacksonville, San Jose, Oklahoma, New York City, Detroit, San Diego, and Baltimore. Look up more cities in the table below.

In absolute numbers, the cities of Phoenix, Ft. Worth, Indianapolis, Memphis, Detroit, Las Vegas, El Paso, Oklahoma, and Baltimore gained more rentals in the form of single-family homes than apartments during the 10-year period.

Per U.S. Census 2016 estimates, the five largest stocks of single-family rentals in a city are in:

  1. Los Angeles 184,000
  2. Philadelphia 111,600
  3. Houston 102,100
  4. Phoenix 100,800
  5. New York 94,000

Smaller metros have the largest shares of single-family rentals

Zooming out to the metro level, suburban areas are where we typically see the most single-family rental homes. On average, about 70% of SFR are located outside the boundaries of the largest principal city of a metropolitan area.

When we analyzed the metro areas surrounding the nation’s 30 largest U.S. cities, we noticed that the less populated metros favor single-family rental homes, while the larger and denser metros favor apartments.

The metro area of Oklahoma City has the largest share of single-family rentals. Almost half (48%) of its rental stock is made up of single-family homes. The second largest share of SFR is in metro Memphis, 45% of its total rentals. The metro area of Detroit holds the third largest share of single-family rentals, 44%, based on U.S. Census estimates. On the other hand, New York City-Newark-Jersey City metro has the smallest share of SFR, as apartments make up 89% of the total rental units. Boston metropolitan area rentals are predominantly apartments as well, 86%. Also, 76% of the rental market in the Greater Chicago Area is represented by apartments. Look up more metros in the table below.

Why are single-family homes for rent so popular now?

While everyone’s been waiting for homeownership to fully regain its pre-crisis strength, single-family rental homes have become “Plan B” for those anxious to break out of their apartments, and can’t buy a house yet, or have lost their homes to foreclosure, short sale, or financial setbacks. A little over half of the total number of single-family home rentals on the U.S. market are occupied by families: married couples and parents with minor children. Although they can cost on average about $1,000 more in monthly rent than an apartment, single-family rentals offer the extra space families need, the privacy of their own home, and the kind of neighborhood they want.

Houses are also the rental of choice for many single people who want to share the cost of rent with other single roommates. This demographic represents almost half of the renters living in single-family houses today. Census data also shows that people from all generations are renting single-family homes: we see a large number of downsizing baby-boomers, older millennials who are starting to form households, as well as Generation X-ers, who already have families with children.

Changes in SFR vs MFR in the top 100 largest U.S. cities (2007-2016):

CityPopulation 2016Single-Family % changeSingle Family # changeMulti-Family % changeMulti-Family # change
Phoenix, AZ1,615,00077%43,80021%26,500
Houston, TX2,304,40039%28,80023%71,600
Fort Worth, TX855,90060%20,00017%9,700
Indianapolis, IN852,50048%20,00014%11,900
Los Angeles, CA3,976,30012%19,20014%88,100
New York, NY8,537,70024%18,4004%86,400
Charlotte, NC842,00055%18,20029%22,100
Austin, TX947,90055%17,90017%21,700
Chicago, IL2,705,00041%17,60013%62,600
Memphis, TN652,80041%17,40011%8,500
San Antonio, TX1,492,50026%16,10027%32,300
Detroit, MI672,80024%15,7001%400
San Diego, CA1,406,60023%15,60013%20,400
New Orleans, LA391,500152%15,500119%30,900
Columbus, OH862,60034%14,80031%32,500
Philadelphia, PA1,567,90015%14,70017%23,500
Las Vegas, NV632,90042%13,0006%3,700
Jacksonville, FL880,60032%12,60027%18,400
Raleigh, NC458,90092%12,30026%13,400
Stockton, CA307,10073%12,100-5%-1,100
El Paso, TX683,10051%12,10014%6,700
Tampa, FL377,20073%11,50038%14,300
Tucson, AZ530,70037%11,200-11%-7,300
Dallas, TX1,317,90026%11,10028%53,800
Nashville, TN660,40047%11,00028%20,000
Denver, CO693,10037%11,00035%27,300
Colorado Springs, CO465,10059%11,00033%11,700
Toledo, OH278,50070%10,80010%3,000
San Jose, CA1,025,40032%10,70022%16,900
Milwaukee, WI595,10046%10,50011%9,800
Oklahoma, OK638,30030%9,9007%3,400
Wichita, KS389,90056%9,9002%700
Sacramento, CA495,20033%9,8009%4,700
Louisville, KY616,30035%9,80035%17,700
Mesa, AZ484,60062%9,6008%3,300
Albuquerque, NM559,30043%9,400-7%-3,800
Baltimore, MD614,70020%9,30012%7,900
Omaha, NE447,00041%8,20021%8,200
Atlanta, GA472,50051%8,10039%25,100
Cleveland, OH385,80029%7,9003%1,800
Miami, FL453,60033%7,80046%28,100
Reno, NV245,30080%7,7004%1,100
Virginia Beach, VA452,60033%7,60021%5,700
Cincinnati, OH298,80066%7,5006%3,800
Richmond, VA223,20080%7,30022%6,700
Durham, NC263,00072%7,30020%6,200
Scottsdale, AZ246,600128%7,20023%4,800
St. Petersburg, FL261,00080%7,10011%2,800
Seattle, WA704,40028%6,90033%34,500
Oakland, CA420,00041%6,50015%9,900
Arlington, TX392,80056%6,400-2%-600
Plano, TX286,000163%6,00024%5,900
Kansas, MO481,40019%6,00016%7,800
St. Louis, MO311,40049%5,9004%2,100
North Las Vegas, NV238,70044%5,70025%2,600
Riverside, CA324,70044%5,600-4%-900
Pittsburgh, PA303,60031%5,50015%6,400
Tulsa, OK403,60021%5,40010%4,700
Portland, OR639,60019%5,30028%19,900
Boston, MA672,80063%5,20020%27,100
St. Paul, MN302,40077%5,20010%3,900
Glendale, AZ245,80061%5,00023%4,600
Chandler, AZ247,50048%4,90047%6,400
Lincoln, NE280,40040%4,50021%5,600
Garland, TX234,60054%4,50010%1,600
Aurora, CO362,20038%4,50025%7,700
Orlando, FL277,20039%4,20044%18,100
Henderson, NV293,00030%4,20025%4,100
Corpus Christi, TX325,70028%4,20017%4,500
Washington, D.C.681,20019%4,10024%27,700
Paradise, NV242,00041%4,00019%6,700
San Bernardino, CA216,20037%4,000-3%-600
Irvine, CA266,10043%3,80073%15,100
Winston, NC242,20028%3,70011%2,600
Fresno, CA522,00013%3,50016%8,000
Santa Ana, CA334,20036%3,500-1%-200
Norfolk, VA245,10024%3,3007%2,100
Arlington, VA230,10076%3,30025%9,800
Lexington-Fayette, KY318,40021%3,3009%3,100
Fremont, CA233,10036%3,30025%3,400
Lubbock, TX252,50020%3,20029%5,700
Fort Wayne, IN261,30026%3,10014%3,200
Chula Vista, CA267,20031%3,0007%1,400
Boise, ID223,20027%3,0007%1,300
Anchorage, AK298,20030%3,000-8%-2,400
Greensborom, NC287,00021%2,90019%6,400
Anaheim, CA351,10038%2,90014%5,500
Laredo, TX258,00035%2,90011%1,300
Minneapolis, MN413,60025%2,40024%15,300
Bakersfield, CA376,40012%2,30029%6,500
Madison, WI252,60046%2,30042%14,600
Chesapeake, VA237,90022%1,80035%3,500
Irving, TX238,30038%1,80015%6,000
Buffalo, NY256,90014%1,7001%600
Jersey City, NJ264,20044%1,50028%15,000
Hialeah, FL236,40012%1,20020%5,000
Baton Rouge, LA227,7009%1,200-8%-2,700
Newark, NJ281,8008%50025%14,100
Long Beach, CA470,100-2%-40014%9,900
San Francisco, CA870,900-9%-2,60014%24,600

Total stock of SFR vs MFR in the metro areas of the 30 largest U.S. cities (2016):

Metropolitan AreaNo. of single-family unitsNo. of multi-family unitsPrincipal CityNo. of single-family unitsNo. of multi-family units
Phoenix-Mesa-Scottsdale269,000342,000Phoenix, AZ100,800154,100
Boston-Cambridge-Newton93,000599,900Boston, MA13,400160,100
Dallas-Fort Worth-Arlington310,300699,400Fort Worth, TX53,40067,700
Austin-Round Rock95,400207,500Austin, TX50,500152,100
Charlotte-Concord-Gastonia129,900168,000Charlotte, NC51,40098,800
El Paso42,30059,300El Paso, TX35,90056,200
Indianapolis-Carmel-Anderson110,400155,900Indianapolis, IN61,30095,600
Nashville-Davidson-Murfreesboro-Franklin81,900152,400Nashville, TN34,30091,700
Las Vegas-Henderson-Paradise144,500208,900Las Vegas, NV43,70060,900
Chicago-Naperville-Elgin296,200971,800Chicago, IL60,400531,800
Memphis95,600109,100Memphis, TN60,00082,800
Houston-The Woodlands-Sugar Land283,400627,300Houston, TX102,100387,500
Denver-Aurora-Lakewood121,900268,200Denver, CO41,000104,300
Louisville/Jefferson County65,700102,300Louisville, KY37,60068,200
Columbus105,400198,400Columbus, OH58,300136,300
Jacksonville77,800
105,200Jacksonville, FL51,40086,200
San Jose-Sunnyvale-Santa Clara86,500194,000San Jose, CA44,00093,000
Oklahoma City90,80089,300Oklahoma, OK42,60053,700
Seattle-Tacoma-Bellevue167,800415,400Seattle, WA31,900139,700
Dallas-Fort Worth-Arlington310,300699,400Dallas, TX53,100248,200
San Antonio-New Braunfels114,700177,000San Antonio, TX77,200150,800
New York-Newark-Jersey City388,8003,086,100New York, NY94,0002,019,700
Detroit-Warren-Dearborn241,200295,300Detroit, MI80,90058,700
San Diego-Carlsbad182,900339,600San Diego, CA84,600183,100
Baltimore-Columbia-Towson143,300216,900Baltimore, MD55,60074,700
Washington-Arlington-Alexandria230,100588,400Washington, DC25,700145,100
Portland-Vancouver-Hillsboro111,000232,200Portland, OR34,00091,800
Philadelphia-Camden-Wilmington274,500467,200Philadelphia, PA111,600165,500
Los Angeles-Long Beach-Anaheim654,4001,600,000Los Angeles, CA184,000696,300
San Francisco-Oakland-Hayward219,200560,400San Francisco, CA26,400195,700

Methodology

Data and terminology source: U.S. Census Bureau, American Community Survey – 2007 to 2016 1-year estimates. A single-family unit is defined as per U.S. Census Bureau as 1 unit attached or 1 unit detached. A multi-family unit is defined as 1 unit in a building of 2 or more units, also referred to as an apartment. A rental or rental unit is defined a renter-occupied housing unit. Where the share of single-family units and the share multi-family units do not add up to 100%, the remaining % share is represented by other types of rentals (mobile, RV and van). City and metropolitan area (MSA –  metropolitan statistical area) are defined as per Census Bureau’s MAF/TIGER database. Amounts may be rounded to the nearest hundred or the nearest thousand. 

Fair use and redistribution

We encourage you and freely grant you permission to reuse, host, or repost the images in this article. When doing so, we only ask that you kindly attribute the authors by linking to RENTCafe.com or this page, so that your readers can learn more about this project, the research behind it and its methodology.

About the author

Nadia Balint

Nadia Balint is a senior marketing writer for RENTCafé. She writes about trends in U.S. real estate and their impact on our everyday life. You can get in touch with Nadia via email: nadia.balint@yardi.com.

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