Estate and mortgageRental Demand Increases Even As Ownership Rises
WASHINGTON -- With the home ownership rate on the rise, you"d think that occupancy rates at apartments across the land would be falling. But that hasn"t been the case.
One reason, of course, is that there are simply more households overall, says Mark Obrinsky, the chief economist and director of research at the National Multi-Housing Council.
Consequently, there is greater demand for rentals as well as owner-occupied dwellings.
According to Obrinsky"s read of recently revised Census Bureau data, there may be as many as 400,000 more renters than had been originally counted. At that time, the official count was 14.2 million, which was an increase of 605,000 above the 1989 figure.
So in total, there are now a million more renters than there was a decade ago, which puts their number much closer to a healthy 15 million.
Another reason for the apartment sector"s vigor is what"s known as the "renters by choice" phenomenon, meaning that people are purposefully selecting tenancy over ownership.
This trend has been well documented, but Obrinsky has some new perspectives on what types of households are choosing to rent rather than to buy.
For one thing, he says 30 percent of all recent movers changed their housing tenure. For another, more households switched from being owners to renters in the last 12 months than the other way around.
Of the recent movers who took up apartment living, 55 percent came from another apartment, an indication -- or perhaps confirmation -- there is considerable movement among renters. But 41 percent came from single-family residences to apartments -- 24 percent from a house they owned and 17 percent from a house they rented.
Why did these families change their living accommodations? Those who were already renting had two main goals, to either be closer to work or school and to take a new job.
These same two reasons were cited by owners moving to rentals, "but (they) were further down the list," says Obrinsky. Their top reasons were to establish their own households or because of a change in their marital situation, either a divorce, marriage or death of a spouse.
The Census Bureau"s data also sheds some light on the type of apartments renters consider before making their moves. Only one if five considered all types of units; the rest restricted their search to the types of rentals with which they were already familiar. And more than half confined their hunt to a single neighborhood.
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