One of the unexpected legacies of the mortgage crisis has been the replacement in many neighborhoods of single-family homeowners with renters. But who exactly are these renters and which homes are they renting? We’ve taken a closer look at the 14.2 million single-family rental units in the US today and found that renters are living in smaller, older and slightly less suburban homes than homeowners, and are poorer, more racially and ethnically diverse and younger than homeowners.
A product of the crisis
From 2007 on in the aftermath of the mortgage crisis, investors (mostly small) bought many of the 7.5 million owner-occupied homes that were in foreclosure or had experienced a short sale, and converted them to rental properties. Many factors sweetened the environment for investors—tight mortgage credit, a large inventory of single-family homes, and continued high demand for such properties among families who could not afford or qualify for a purchase loan.
The result was a huge increase in the number of occupied single-family rental properties in the aftermath of the crisis, from 10.5 million units in 2005 to 14.2 million in 2013, a 35 percent increase, according to the American Housing Survey. Rental units comprised 61 percent of the 6.1 million unit net increase in single-family housing stock from 2005 to 2013, with the remainder split between vacant single-family units (21 percent) and owner-occupied single-family units (17 percent).