Of the estimated 122.8 million households across the US, over a third are occupied by renters. The occupants of these rental homes tend to be young people, ethnic and racial minorities, and those with lower incomes.
Most of these renters opt for apartments over houses as they tend to be closer to the big cities, meaning local amenities are much closer, making travel much cheaper and simple. Here are some trends we are seeing from renters across the US.
Key Renting Statistics
Of all the US households, around 34% or 44 million are occupied by renters. Of these renters, it is found that the largest proportion are under the age of 35. Close to 40% of renters live independently, which is very different compared to homeowners, with nearly 60% being married couples. In the top 25% net worth percentiles there are 3.9% are renters.
The typical summary for a renter in the US is someone who has never been married, aged around 40 years of age, has around four years of college education, and earns a little over $42,000 each year.
The national median rent is in the region of $2,000 per month. The most expensive states to rent are California, New York, and Massachusetts. The expenses that renters have to pay are nearly double the recommended 30% ratio of rent-to-income, sitting at 57%.
The most common rental home is a 2-bedroom apartment with 1.5 baths and an area between 1,000 and 2,000 square feet.
How Many People Rent?
It has been shown by the market & consumer database Statista that nearly 44 million housing spaces are rented, comprising 34% of the complete sum of U.S. households.
The U.S. Census database has stated that the average household features 2.6 people; this equates to the number of renters being 114.4 million of the U.S. population, around 35%.
The Renters Demographic
US renters are 39 years old, unmarried, have at least four years of college education, and have a median income of $42,500, which is low compared with the national median income of $67,000. There are over 80% of renters have pets, and one-third of them have children under 18.
The Most Likely State To Rent
Of all the states in the US, the most likely place to be a renter is California, Columbia, and New York. It has been found that over 14% of households in California are less likely to own their home, this could be due to California being 50.1% more expensive than the nationwide median mortgage payment.
Of the close to 300,000 homes found in Columbia, over 50% are renters, while the state of New York has 46.5% of residents being renters. Although New York has a smaller percentage, the number of people in the city is enormous with a total of just under 7.5 million.
The mortgage payments are much higher in these three states than seen in others across the country which is why the likelihood of renters residing here is much greater. It is likely for this reason that search results online for furnished apartment rentals new york city are so popular, furnished rentals have become increasingly popular as people realise they are more cost-effective than buying furniture as well as paying their rent, paying a little more rent for furnishings being covered ends up being cheaper in the long run. As well as this, not having to buy furniture makes it much easier when moving from place to place due to not being tied down by so many possessions.
Renters vs. Homeowners
There are few upfront costs when it comes to renting compared to buying a property of your own. Other perks include lower upkeep expenses, greater freedom, and fewer responsibilities. As a group of people, renters tend to be much younger, live alone, and have less overall wealth than homeowners.
Pew Research has gathered a considerable amount of data supporting these statements showing that over a third of all those who rent are under 35, while the largest bracket of homeowners falls in the age bracket of 55–64.
Renters & Rental Properties
Renters should consider how much the unit fits their budget when considering a rental property, followed by how many bedrooms it has. Additional extras such as rooftop decks, pet areas, and shared gyms are considered a necessity.
The majority of renters reside in an apartment building. The typical rental apartment often features 2 bedrooms and 1.5 bathrooms in an area between 1,000 and 2,000 square feet. It was found that the average renter will submit two applications and a security deposit that ranges anywhere between the region of $500 and $999.
Two-thirds of the people who are currently renting are planning to move again in the next three years, with close to half of those opting to move to another rental and just 37% looking to purchase their first home.
Rent vs. Mortgage Payments
Historically it has been shown that monthly mortgage payments are higher than rent. According to some sources, as of May 2022, the average mortgage payment across the nation is just over $2,000 at a fixed rate over 30 years or $3,059 at a fixed 15-year agreement.
Comparing these prices to that of the national average rent costs, a 2-bedroom apartment is only around $12 more per month, which is a $1,000 difference compared to the 15-year rate.
From these results, the national average mortgage payment is anywhere between $12 and $1,000 higher than the average monthly rental cost.
The great thing about being in a rental property is that the occupant is not responsible for things such as home insurance, taxes, HOA fees, and in some cases, utilities. All of these aspects of owning a home widen the gap when it comes to expenses compared to renting.
Homeowners, on average, pay a much higher monthly outgoing in 38 of the 50 largest states of the U.S., making renting a much more viable option for those on a lower income compared to buying in the big cities.
The argument surrounding buying and renting is a difficult one, with so many positives and negatives for both. If you’re looking to rent in the US, it is likely that you will opt for a 2-bedroom apartment in a big city to accommodate the type of quality of living you’re looking for.
The freedom that comes with renting means you’re not tied down into a single place, making it perfect for younger people who are looking to see the nation a little more and ultimately wait until their salary is at a level they feel comfortable and can find the perfect place they would like to settle down and eventually buy their own place.