Tuesday, September 27, 2016

Lawler: Renter Share of Single-Family Market Declined Slightly in 2015

by Bill McBride on 9/27/2016 05:12:00 PM

From housing economist Tom Lawler:

Data from the 2015 American Community Survey suggest thatFor the first time since 2006, the number of single-family housing units occupied by renters declined slightly last year. The share of occupied single-family (detached and attached) housing units occupied by renters, which went up from 14.8% in 2006 to 18.9% in 2014, declined very slightly to 18.8% in 2015.

Occupied Single Family Detached and Attached Homes, American Community Survey
  20152014Change
Total80,881,17380,426,594454,579
Owner 65,703,47565,231,767471,708
    15-34 year olds6,165,4886,153,32812,160
    35-64 year olds39,953,12340,044,935-91,812
    65+ year olds19,584,86419,033,504551,360
Renter15,177,69815,194,827-17,129
    15-34 year olds4,676,5674,735,281-58,714
    35-64 year olds8,800,4008,819,476-19,076
    65+ year olds1,700,7311,640,07060,661
Renter Share18.8%18.9%-0.1%


Renter Share of Single-family market Click on graph for larger image.

ACS estimates suggest that the number of owner-occupied single-family homes declined by about 260,000 from 2006 to 2014, while the number of renter-occupied single-family homes increased by almost 3.9 million.

On the owner-occupied single-family front, from 2010 to 2015 the share of owned homes occupied by households 65 years or older rose from 25.5% to 29.8%.

Some analysts believe that the combination of a high renter-share and a high “old-folks” share of the single-family market is at least partly responsible for the relatively low level of single-family homes for sale.

CR Note: My view is these are two of the key reasons existing home inventory is low: 1) As Lawler notes, a large number of single family home and condos were converted to rental units. Most of these rental conversions were at the lower end, and that is limiting the supply for first time buyers. and 2) Baby boomers are aging in place (people tend to downsize when they are 75 or 80, in another 10 to 20 years for the boomers).