Having children is not, for now anyway, a strong motivator to buy a home, according to a new study by RENTCafe.
Before talking money, let’s first talk about what families with minor aged children are actually doing in terms of buying or renting single-family housing units.
In RENTCafe’s analysis of the nation’s 30 largest markets, homeownership rates have declined by -14% among families with minor children (3.6M families) between 2006-2016. Conversely, RENTCafe found that families with minor aged children are increasingly renting to the tune of 1.9M or +16%.
Some cities show higher and lower extremes concerning buying/renting rates than others. For example, Charlotte’s renting families have surged some 73% from 2006-2016. On the other hand, renting families with minor aged children have decreased as high as 20% in Detroit, Los Angeles, Las Vegas, Riverside and Miami.
High home prices appear to be the central determining factor for families with minor aged children to rent. According to RENTCafe, prices of single-family homes have increased 75 times faster than rent prices in the last 5 years. And, in 29 of 30 largest metros, home prices have outpaced rents from 2013-2018.
In fact, for the first time ever, according to RENTCafe and Yardi Matrix, rents for a single-family housing unit just hit a high of +$1,400/month. This represents an increase of +2.9% y/y and 0.9% from May 2018.
Big-time individual and institutional investors, according to Bloomberg, are doubling down on buying single-family rental homes to cash in from increasing numbers of renting families. In a study by Amherst Holdings, investors bought more single-family rental homes in 2017 than in 2016. This uptick in buying single-family unit rentals in 2017 is the first increase since 2013. Developers too have gotten into this rental act…Amherst Holdings indicates that 50% of all apartments built from 2006-2016 were built as family sized units.