Single-Family Rentals on the Decline

As home prices rise, more Americans are turning to single-family rentals for a long-term affordable living solution. Yet the nationwide share of single-family rentals has declined over the past decade. According to the National Association of Realtors, the U.S. has added about 10.7 million single-family homes over the past 10 years, but the number of single-family rentals has declined from 15.2 million to 14.4 million during the same period. As a result, the share of single-family homes being rented has fallen from roughly one in five to about one in six homes.

Most metros are seeing the share of single-family rentals decline, but a small group of metros are actually seeing the share of single-family rentals grow. For the top 250 largest metros, only about 8% have a higher share of single-family rentals than they did one year ago. This trend is true for Columbia, Mo.; Springfield, Mass.; New Haven, Conn.; Yakima, Wash.; and Norwich, Conn.; among several others.

What do they have in common? Even though these metros aren't Sun Belt boomtowns, they check some of the boxes that support that kind of growth: a steady flow of renters (students and military), relatively tight apartment markets, and a supply of older single-family houses that can be rented.

These patterns show that the geography of single-family rentals mirrors that of America's housing. In markets dominated by single-family homes, renting them is simply part of the composition of their housing stock. And, in fast-growing, more affordable metros, rising rental shares reflect sustained housing demand.