While renting a home is often associated exclusively with apartment living, there are many types of homes in the rental housing stock. Renting a home, regardless of structure type, can provide a housing option for individuals and families who are on a budget, saving to purchase a home, or who expect to change locations in the near-term. And while builders have accelerated their pace of multifamily construction to meet rising rental demand, it is useful to understand the composition of the current rental housing stock.
Based on the Census Bureau’s 2013 American Housing Survey, the rental stock increased 1. 4 million from 2011 to 2013 to a total of 40 million residences. Contrary to popular expectations, most rental homes are smaller properties, single-family homes and multifamily buildings with 2 to 4 units.
Single-family detached homes made up the largest individual share of the rental housing stock, 29 percent of the entire rental market in 2013. Combining that portion of the market with the share of townhomes (single-family attached), all single-family residences accounted for 35 percent of the occupied rental stock.
The second largest share of rental stock was multifamily homes with 2 to 4 units (19 percent).
It is the case that rental housing tends to be located in urban areas. 85 percent of rental homes were located in metropolitan areas (MSAs), with 43 percent in central cities and 42 percent in suburbs. Multifamily dominated the housing rental market in both central cities and suburbs, largely due to the high land costs. Single-family rental homes were most popular in non-metropolitan areas.
The share of rental homes increased moderately almost across all structure types from 2011 to 2013, except for townhomes. The rental share of single-family homes, including both detached and townhomes, increased three percent from 2011 to 2013, compared to only a one percent increase in multifamily rental share. However, the increase for single-family rental inventory was not due to initially built-for-rent purposes, but came from formerly owner-occupied to rental homes.