REALTOR.

COM ®

RENTAL MARKET OUTLOOK

Realtor.com Economics

May 2018

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RENTAL MARKET TRENDS
Key expectations from realtor.com

• Housing and Households

• Does Multi-family = Rental?
• Demand Drivers
• Household Demographics Favor Owning
• Supply Side
• Building Boom, Rental Vacancy Remains Low
• National Trends
• Rents Continue to Rise, but Slowing Pace
• Slowing Rents Lead to Tapering Off in Building

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 HOUSING &
HOUSEHOLDS

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MULTI-UNIT BUILDINGS: 1/3 OF OCCUPIED STOCK
38 million of 119 million occupied units are in attached or multi-unit buildings

6%
4%
5%
5%
4%

4%

6% 66%

1, detached 1, attached 2 3 or 4 5 to 9 10 to 19 20 to 49 50 or more

Source: Realtor.com® Analysis of US Census Bureau American Community Survey (2016)

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OWNER AND RENTER HOUSEHOLDS
Higher homeownership rate in single-family units; much lower in multi-family

100%
90% 17%
80% 39% 37%
70%
60% 78% 85%
87% 90% 92% 88%
50%
40% 83%
30% 61% 63%
20%
10% 22% 15%
13% 10% 8% 12%
0%
1, 1, 2 3 or 4 5 to 9 10 to 19 20 to 49 50 or Overall
detached attached more
Owner Renter
Source: Realtor.com® Analysis of US Census Bureau American Community Survey (2016)

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OWNER AND RENTER HOUSEHOLDS
Less than 1/3 of Rental Households are in Single-family, Detached Homes

100%
90% 6% 13%
80% 9%
70% 11%
60% 12%
50% 11%
40% 88% 8%
30% 7%
20%
30%
10%
0%
Owner Renter
1, detached 1, attached 2 3 or 4 5 to 9 10 to 19 20 to 49 50 or more
Source: Realtor.com® Analysis of US Census Bureau American Community Survey (2016)

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DEMAND
DRIVERS

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DEMAND DRIVERS: MILLENNIALS SHIFT TO OWN
Gen Z Entering the Rental Market
US Population by Age, End of 2016
61 million 78 million
5,000 65 million 88 million 29 million
Z Millennial X Boomer
4,500

4,000

3,500

3,000
Thousands

2,500

2,000

1,500

1,000

500

0
0
4
8
12
16
20
24
28
32
36
40
44
48
52
56
60
64
68
72
76
80
84
88
92
96
100+
Source: Realtor.com® Analysis of US Census Bureau Population Estimates (2016)

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CHEAPER TO RENT IN 58% OF COUNTIES
Simple monthly cost analysis favors renting now in more places

March 2018
Source: Realtor.com® Analysis of HUD Median Rents,
Nielsen Pop-Facts Demographics and Realtor.com® Data

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SUPPLY
SIDE

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MORE MULTI-FAMILY SUPPLY
Last 4 years have seen more building than any stretch back to 1989

Multi-family Housing Starts

450
400
350
300
250
200
150
100
50
0

2018 F*
1988

2005
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004

2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Source: Realtor.com® Analysis of US Census Bureau/HUD New Residential Construction

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 4
5
6
7
9
8
10
11
12
1985 - Q1
1986 - Q1
1987 - Q1
1988 - Q1
1989 - Q1
1990 - Q1
1991 - Q1
1992 - Q1
1993 - Q1
1994 - Q1
1995 - Q1
1996 - Q1
1997 - Q1
6.9 percent vs. 9.5 percent 2000-2009

1998 - Q1
1999 - Q1
2000 - Q1
2001 - Q1
2002 - Q1
2003 - Q1
2004 - Q1
2005 - Q1
2006 - Q1
2007 - Q1
2008 - Q1
2009 - Q1
2010 - Q1
2011 - Q1
2012 - Q1
RENTAL VACANCY: ON PAR WITH MID-1980S

2013 - Q1
2014 - Q1
2015 - Q1
2016 - Q1
2017 - Q1
2018 - Q1
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Source: Realtor.com® Analysis of US Census Bureau Housing Vacancy Survey
RENTAL
TRENDS

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FASTEST GROWING STATES ARE IN THE WEST
But Rent Growth Slows

State Rent Change State Rent Change

Nevada 3.7% West Virginia -1.2%
Utah 3.6% Hawaii -1.1%
Idaho 3.0% Alaska -1.1%
Arizona 2.5% North Dakota -0.6%

Source: Realtor.com® Analysis of Apartment List Data

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FAST AND SLOW GROWING CITIES
More Geographic Variation

State Rent Change State Rent Change

Midland, TX 28.3% Leawood, KS -5.1%
Coram, NY 16.3% Miami Beach, FL -5.0%
Norcross, GA 11.6% Cheyenne, WY -3.8%
Puyallup. WA 10.7% Towson, MD -3.6%

Source: Realtor.com® Analysis of Apartment List Data

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U.S. RENTS CONTINUE TO GROW
But Rent Growth Slows

4%
3.5%
4%
3.0%
3% 2.7%
3%
2.1%
2%
2%
1%
1%
0%
2015 2016 2017 2018*F
Source: Realtor.com® Analysis of Apartment List Data

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 Economic Research
realtor.com®

economics@realtor.com
@RDC_Economics
Access market data, research, and presentations at
https://www.realtor.com/research

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THANK
YOU
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