An individual’s tenure choice (whether to rent or own) is based on a number of factors including age, income, and housing supply. It is therefore not surprising that characteristics differ markedly by tenure. The purpose of this post is to describe the typical household by tenure.
Age is an important component of tenure choice. Younger individuals are less likely to have the income necessary to purchase a home. In addition, marriage, which often precedes home ownership, typically occurs in the late twenties. In 2013, the Census estimates the median age at first marriage for males is 29 while the median age at first marriage for females is 26.6.
The age distribution of householders by tenure is provided below. A householder is defined by the Census as the person in whose name the housing unit is owned or rented.
According to the 2012 American Community Survey (ACS) ten-year age breakouts, the largest share of owners falls within the age bracket between 45 to 54 years. Nearly 17 million or 22.7% percent of all owners are between 45 to 54 years. The largest share of renters falls within the age bracket between 25 to 34 years. Just over 11 million of 26.4% of all renters are between 25 to 34 years.
Income, another critical component of tenure choice, is also provided in the 2012 ACS. The median income for rent-occupied households was $31,888. The median income for owner-occupied households was more than twice that amount at $65,514.
The income measure provided includes all individuals in the household. Therefore, some of the difference is due to household size. According to the 2012 ACS, the average renter-occupied household size, which includes children, was 2.53 occupants. The average owner-occupied household size, which also includes children, was slightly higher at 2.7 occupants.
Additionally, a large share of renter-occupied units is single-income households. Nearly ten million or 26.1% percent of all renter-occupied units are single-income households. Only 13.3% of owner-occupied units are single-income households. The largest share of owner-occupied units is married households at 60.1%.
According to the Bureau of Labor Statistics 2012 Consumer Expenditure Survey (CE), average income for married couples with children was $98,104. The average income for all married couples was $90,393 in 2012.
The data described above from the 2012 ACS presents a brief snapshot of housing characteristics by tenure. The typical owner-occupied household is headed by an individual between 45 to 54 years. The median household income in 2012 was $65,514. The average household size was 2.7 occupants with the most common household type being married.
The typical renter-occupied household is headed by an individual between 25 to 34 years. The median household income in 2012 was $31,888. The average household size was 2.53 occupants with the most common household type being single. Understanding these differences can help those interested in meeting the needs of occupants.