More homes rented in wake of recession

Zillow Published:

By David Widner

Nationwide, more and more single-family homes are being rented instead of owned by their occupants, according to analysis of U.S. Census Bureau data from the American Community Survey by USA Today.

In 2012, USA Today found that at least 20 percent of occupied single-family homes were being rented in 32 of the nation’s largest metro areas. In 2006, only seven of those metro areas had that percentage of home rentals.

The trend reflects the dramatic increase in foreclosures that occurred during the recession, as many homeowners who lost their properties had to find rental homes that could accommodate their families and possessions.

According to USA Today’s analysis, the highest percentages of home rentals vs. ownership are concentrated in California, whose housing market was hit hard by the recession. Golden State metro areas with high percentages of rentals include Stockton (32.2 percent), Fresno (31.1 percent), Bakersfield (30.6 percent), San Diego (26 percent), Los Angeles (25.7 percent), and Riverside (25 percent). Also near the top of the list are the resort areas of Honolulu (29.6 percent), Las Vegas (28.9 percent) and Orlando (21.8 percent).

The highest increase in single-family rentals since 2006 have occurred in Las Vegas (10.3 percent); Cape Coral, Fla. (10 percent); and Phoenix (9.3 percent), three metro areas that had some of the highest foreclosure rates during the recession.

In the Pacific Northwest, the Portland area had a 19.2 percent home-rental rate in 2012 (a 5.0 percent increase over 2006), while Seattle had an 18.5 percent rate (5.1 percent greater than 2006). The lowest percentages nationally were in cities in the Northeast, such as Hartford, Conn. (8.6 percent); Albany, N.Y. (9.6 percent); Boston (10.2 percent); and Worcester, Mass. (10.5 percent).

As demand for rentals has risen, so has the average monthly rental cost for homes in many cities. For example, as of September 2013, the Zillow Rent Index for the Naples, Fla., metro area had increased by 14.2 percent year-over-year, compared with the national average of 2.0 percent. Other metro areas with significant year-over-year average rental-price increases include Lincoln, Neb. (13.3 percent); Burlington, Vt. (12.2%); Oklahoma City (11.3 percent); and Ogden, Utah (10.6 percent).

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