The latest American Community Survey, released by the U.S. Census Bureau, provides some interesting insight on renting and home ownership in America. In this article, Kriston Capps of CityLab highlights some of the details of the survey, and explains why more renters should actually be purchasing homes today.
Five years into the recovery, renters are still paying the price for the Great Recession. Rents are high and rising across much of the nation, at least in the places where many people live. That’s not surprising. What’s fascinating is the flip side – the changes happening in homeownership.
The U.S. Census Bureau has just released data from its regular five-year American Community Survey. The survey provides detailed statistics on all kinds of factors in American life, including college graduation rates, poverty rates, segregation and integration, and housing data – lots and lots of housing data.
The latest batch shows that rents are red hot in the nation’s largest and fastest-growing cities. That’s something people who live in those places know from experience. The median gross rent is more than $1,000 in 182 counties, split fairly neatly between the South (65 counties), West (62), and Northeast (49). In the Midwest, where rents are a lot cheaper, just six counties boast such high rents.
The ACS data show that median gross rent increased in 719 counties between 2005–2009 and 2010–2014, while the median gross rent decreased in 204 counties. Renters have returned to cities in droves. Housing starts are still at near-historic lows five years into the recovery – even after median house prices returned to pre-crisis levels. And for a number of reasons, Millennials aren’t forming new households even when they move out of their parents’ homes.
So it’s to be expected that homeownership rates aren’t up. Between 2005–2009 and 2010–2014, the percentage of homes that were owner-occupied fell in 931 counties. The number ticked up for just 115 counties. Overall, there was no change in homeownership figures across most of the nation – in 2,096 counties, to be exact – but those places aren’t where most of the nation lives. This all squares: Where renting is waxing, owning is waning.
What’s more surprising is what’s happening with the costs of homeownership: They’re falling, and they’re falling all over the place. Between 2005–2009 and 2010–2014, the median monthly costs of owning a home decreased in 1,163 counties. In another 1,798 counties, the change wasn’t significant. The costs of homeownership – including mortgage, insurance, loan fees, and so on – rose in just 177 counties. Many of those overlap with the 171 counties where owners paid mortgages of more than $1,750, and a lot of these counties (63 counties, nearly 40 percent) are located in the Northeast.
Put more simply: More renters should be buying homes. It would be the cheaper option for a lot of them. Except for in the cities where housing prices are simply soaring (New York, San Francisco, and Washington, D.C., to name three), more renters ought to be availing themselves of homeownership.
