May 31st, 2011 8:27 AM by Lisa Carey
According to a USA TODAY analysis of Census data, more than 500 midsize and large cities have seen a rise in the number of homes that are rented versus owned.
Just under 4 million homes have been lost to forclosure in the last five years, changing a great number of formerly owner-occupied properties in rental homes. And, the shfit ot rentals could be long-lasting, change neighborhood stability and how familes build wealth, according to economists.
Of the 100 largest cities, some of those with the largest shifts were Irvine, Calif., which went from about 40% of occupied homes rented in 2000 to 49.8% in 2010; Philadelphia, from 40.7% to 45.9%; and Birmingham, Ala., 46.3% to 50.7%. Twentyfive cities — including Baltimore, Minneapolis, Salt Lake City and Sacramento — swung from having more than half homeowners in 2000 to majorities of renters in 2010. In one — Reading, Pa. — 57.6% of occupied homes were rentals in 2010, up from 49% in 2000.
Florida, California and Arizona had the most cities where the share of renter-occupied housing grew by at least 5 percentage points. All three states have been hit hard by foreclosures.Nationwide, 34.9% of occupied homes were rented in 2010, up from 33.8% in 2000. The Census data that USA TODAY analyzed for cities covered only housing within the cities’ boundaries, not their much larger metropolitan areas.Vacant properties, excluding seasonal or vacation homes, accounted for 7.9% of U.S. housing units in 2010. It’s not clear how many of those have since become rentals or owner-occupied homes.The renter household market remained fairly stable from 1990 to 2006, says Daniel McCue, senior research analyst at Harvard University’s Joint Center for Housing Studies. Since 2006, when housing prices peaked, the number of renter households in the U.S. has grown an average of 692,000 a year, while owner households have fallen an average of 201,000 a year, Census surveys show.Several factors will boost rental growth for years to come, conclude experts, including continued foreclosures, continued drops in home prices that frighten buyers and potential cuts to government subsidies supporting homeownership. Currently, a movement is underway to increase the downpayment on FHA loans from 3.5% to 20% - putting the dream of ownership far out of reach for many potential buyers. However, 74% of renters believe owning is superior to renting, said a recent survey by Fannie Mae. “There’s still a pull toward homeownership, although it’s been diminished,” McCue says.
Source: USA TODAY and TALLAHASSEE DEMOCRAT