Except for a brief period during the 2000s, the rental market in the US has been quite strong. Historically, rental statistics show that anywhere between 30 and 40% of people rent properties instead of buying them; and for good reason too!
For starters, young people most often lack the capital to put down on a property to get a mortgage. Instead, they must rent their accommodation for several years while they work towards stacking a downpayment. Then there’s also the fact that many people don’t want to tie themselves to a single location; many prefer the freedom that renting offers.
However, as you’ll see from the following statistics, not everyone rents out of choice. For many, it is an economic necessity.
So, let’s dive right in!
Eye-Opening Home Rental Statistics and Facts (Editor’s Pick):
USA Residential Rental Statistics and Trends
1. The market size of the apartment rental industry in 2021 is $169.5 billion.
This size is measured by revenue. If we compare US rental market size in terms of the apartment and real estate, it can be observed that the apartment rentals are growing faster than the overall real estate rental and leasing sector. In fact, it has become the second-ranked real estate by market size. Simply stated, if it was asked what is the rental market like now, it would be easy to say that it is booming. This is evident from the next statistic.
Source: Ibis World
2. Over the last 5 years, the apartment rental industry size has increased by 0.2%.
The figures are from the period between 2016 and 2021. The demand for apartment rentals has also increased primarily because of the high real estate prices and homeownership rates. Thus, people in urban areas prefer to live in apartments. Still, it is interesting to note that the industry is progressing upward, but if it is compared to the overall economy, the market size of the apartment rental industry has been comparatively slow.
Source: Ibis World
3. According to the new report on renting statistics, it is expected that the market size of the apartment rental industry will experience a downward curve.
The market size is expected to decline by 5.9% this year. The decelerated industry performance may be due to the subprime mortgage crisis, because of which the apartment rental industry may undergo a structural change. At present, most properties for rent are single investor-owned or non-owner occupied.
Source: Ibis World
4. The average rent of a one-bedroom apartment in the US fell by 2.01% in 2018
(Abodo)
If you think that rent prices do nothing but go up, you’d be wrong. Data from Abodo suggests that the rent on one-bedroom apartments actually fell in 2018 from their highs in 2017. People blamed several things, such as the fires in California, the floods in Texas, and the huge political uncertainty across the country.
A decrease in the cost of rent is somewhat unusual. Most economists expect rental prices to rise anywhere between 3 and 5% per year, slightly above the rate of inflation.
5. At $582, Arkansas has the lowest median home rent in the USA for a one-bedroom apartment
(Abodo)
If you’re looking for an inexpensive way to live, then Arkansas is the place to do it. Of all the states, Arkansas is the one with the cheapest rent statistics, indicating that the average person pays just $582 per month for their one-bedroom flat.
States on the east and west coasts tend to be costlier. In Massachusetts, for instance, average rents run as high as $2,139, and in California, they are still fairly high at $1,608. Ohio and Indiana are the cheapest states after Arkansas, with monthly rental costs of $682 and $685, respectively.
6. 43.3 million households are now up for rent in the US
(Pew)
How many people are renting their homes in the USA? The latest figures suggest that there are roughly 43.3 million households now renting in the US, up from 34.6 million just before the Great Recession. Meaning, the total market share of the US renting market sits at 36.6%, just slightly lower than the 37% back in 1965.
7. 91 of the 100 biggest US cities have seen an increase in rent over the last year
(Apartment List)
Idaho is the state that saw the fastest annual growth of any in the union, with rentals going up by more than 4.9%.
8. Rents in Las Vegas are going up by more than 4.9% per month
(Abodo)
Rental statistics by city suggest that rents on one-bedroom apartments are going up in Las Vegas by nearly 4.9% per month, making it the fastest-growing market in the country. The second-fastest monthly rental increases are in Dayton, Ohio, with Milwaukee and Scottsdale coming in third and fourth, respectively. Rents are falling the fastest in Cleveland, Ohio, where they’re going down by 2.1% each month, and Santa Ana, California, where they’re declining by 1.75% per month.
9. In New York, 39–50% of household income goes on rent
(Statista)
Rental statistics in New York paint a bleak picture. While New Yorkers earn more on average than elsewhere in the country, people have to spend a big chunk of their income directly on their rent. Data from Statista suggests that 39–50% of the money households earn every month goes on rent. Overall, the high prices in New York are the result of both supply and demand, among other factors.
10. $1,588 is the median home rent in the US
(Statista)
Statista rental statistics 2019 suggest that the monthly median asking rent for an unfurnished apartment in the US is now $1,588. That figure has gone up by more than 50% during a ten-year period between 2007 and 2017, suggesting that the housing market is still booming, despite the credit crunch of 2008–2010.
11. Renters dish out around $485 billion in rent every year
(Fortune)
According to data from Zillow, reported in Fortune Magazine, the US residential rental market value is now $485 billion per year. A more in-depth analysis shows that individual cities contribute an enormous amount to the total figure. New York and Los Angeles alone make up more than 8% of the total. In New York, for instance, renters paid more than $54 billion in rent last year.
12. 7% of rental properties remain unoccupied
(FRED Economic Data)
The current rental vacancy rate is 7%, the lowest rate since the ‘80s. Historically, vacancy rates have been much lower. For instance, in the ‘70s, they hovered just above 5%, but this was a historical anomaly. The rental property occupancy rate in the USA fell considerably in the run-up to the 2008 financial crisis and then rose again shortly after.
13. 65% of households of people under the age of 35 are rental properties
(Pew)
Around 65% of all people under 35 rent their homes, reflecting the huge divide in wealth. Older people tend to have accumulated more capital throughout their working lives, allowing them to purchase their homes outright, whereas younger people are only just starting out in their careers, private rental statistics suggest. The prevalence of homeownership in the under 35s group has fallen considerably since the noughties — a time when just 57% of people in that age group rented a property.
14. 41% of people aged 35–44 rent their homes
(Pew)
As age increases, the percentage of people that rent instead of own their properties falls, according to most rental property statistics. In the 35–44 age group, 41% of people rent their homes, compared to just 28% in the 45–64 age range, and 21% in the 65 and over category.
15. Americans have an average FICO score of 695 and a Vantage score of 673
(Value Penguin)
A FICO score of between 660 and 719 is considered average/fair, while those between 620 and 659 are considered poor. The current average resident score in the USA (2019 data) is higher than it had been during any period since the great recession when FICO scores fell to their lowest ebb in recent history at 687.
Now, as for credit score — they vary wildly by age. 38% of people under the age of 30 have a subprime FICO score compared to just 8% of those over the age of 70. As age increases, so does the average credit score.
Single-family Rental Statistics in the US
16. 70% of Americans live in single-family homes
(Builder)
Single-family homes have a somewhat slippery definition, though it is generally defined as a self-contained home with all its own facilities. The vast majority of Americans — some 70% — live in homes of this variety.
17. The average renter stays for three years in a single-family home
(National Real Estate Investor)
Tenants stay for an average of three years, depending on several factors including property prices in the local area. Stays of between four and six years are not uncommon — much longer than the average rental period on a one-bedroom apartment, most recent rental statistics show.
18. 80% of people in the US would prefer to live in a single-family home
(Builder)
Researchers have found that more people would prefer to live in a single-family home compared to how many actually do. The reason for this is that living in a single-family home tends to be more costly than living in shared accommodation. Survey data also reveals that 53% of people would prefer to live “away from it all,” while 34% would prefer to be right in the middle of the action.
Insurance and Short-term Rental Stats and Facts
19. 3.5% of the 252 million housing units in the US are second homes
(Hostfully)
Data shows that more than 3.5% of the country’s total housing stock entails second homes — mostly holiday homes for when wealthier segments of society want to take a break. 44% of these second homes are professionally managed, and between 25–35% of them are rented out regularly.
20 There are more than 23,000 vacation rental companies in the US
(Hostfully)
Vacation rental industry statistics reveal that there are now more than 23,000 vacation rental companies in the US, comprising more than 20% of the global market. The market is also growing rapidly. Recent figures suggest that holiday rentals are increasing by more than 8.5% on average across the country, with the fastest growth in places like Florida and California.
21. Renters insurance averages $16 per month in the US, or $187 per year
(Value Penguin)
Insurance for people who rent their homes has historically been fairly cheap. Average rental insurance across the US is just $16 per month, although there are regional fluctuations. If you live in North Dakota, for instance, you’ll pay $9.58 per month on average. By contrast, those in Mississippi must fork out $20.33 per month.
Insurance and Short-term Rental Stats and Facts
22. 3.5% of the 252 million housing units in the US are second homes
(Hostfully)
Data shows that more than 3.5% of the country’s total housing stock entails second homes — mostly holiday homes for when wealthier segments of society want to take a break. 44% of these second homes are professionally managed, and between 25–35% of them are rented out regularly.
23. There are more than 23,000 vacation rental companies in the US
(Hostfully)
Vacation rental industry statistics reveal that there are now more than 23,000 vacation rental companies in the US, comprising more than 20% of the global market. The market is also growing rapidly. Recent figures suggest that holiday rentals are increasing by more than 8.5% on average across the country, with the fastest growth in places like Florida and California.
24. Renters insurance averages $16 per month in the US, or $187 per year
(Value Penguin)
Insurance for people who rent their homes has historically been fairly cheap. Average rental insurance across the US is just $16 per month, although there are regional fluctuations. If you live in North Dakota, for instance, you’ll pay $9.58 per month on average. By contrast, those in Mississippi must fork out $20.33 per month.
Renting Vs Owning
Here is a quick overview of statistics on landlords and tenants. Take a look:
25. As per research, multifamily property rent in Manhattan constitutes 56.3% of the household income in 2021.
This study was performed in selected cities in the United States based on the share of multifamily property rent in household income. Thus, it was found that Manhattan had the highest share, followed by Los Angeles, which constituted 32% of household income.
Source: Statista
26.The US rental occupancy rate was 27% in 2016.
The survey showed that 68% of the respondents in the survey owned homes. 27% of the respondents were tenants who rented homes as their primary place of residence.
Source: Statista
27. 43% of the respondent said that they didn’t have the financial strength to afford a home.
This shows that almost half of the respondents in the survey currently living on rent didn’t have the financial strength to buy a home or realize their homeownership dream. This was primarily because of high homeownership and mortgage rates, which made it extremely hard for people to own a home.
Source: Statista
28. 49% of tenants were under 30 years of age.
As per the rental industry trends, 49% of the tenants were below 30 years. This showed that millennials prefer renting properties instead of seeking homeownership. Similarly, only 9% of tenants were 65 years and older. These percentages show a considerable difference in the homeownership rate among the age group.
Source: Statista
Bottom Line
The US rental market has returned to normal after a short hiatus. We’ve seen the structure of the market shift sharply from homeownership back towards the traditional setup where the young rent and the old buy.
With that said, things aren’t the same as they were in the 1970s. All forms of accommodation have become much more expensive in the intervening period, especially in boomtowns. Rental statistics show that the difference in average rents between a place like New York and Little Rock, Arkansas, is more significant than it has ever been. The parts of the country that are doing well economically are also seeing massive growth in rental income, whereas those that are on the quieter side of business growth are noticing more a modest change.