Across the country’s largest metros, residents of the Los Angeles-Orange County area have the highest propensity to rent, rather than own, their housing. Census Bureau information shows that rental units are the choice for 52.4% of all households in this locale, compared to the U.S. norm of 36%. The key influence behind the high propensity to rent is just what you think it is – expensive for-sale home prices that are beyond the affordability reach of much of the populace. The National Association of Realtors places the median sales price of recent transactions in Los Angeles-Orange County at just under $500,000, and Zillow reports typical home values in the area at just over the half-million-dollar mark. Half of the nation’s 10 metros with the highest propensity to rent are simply very expensive places to buy. Take a look at this infographic of the hottest metros for renters across the nation:
Los Angeles-Orange County is joined by New York-Northern New Jersey, San Francisco-Oakland, San Diego and San Jose. Another market group with renters comprising an unusually large share of total households includes Fresno, Las Vegas, Riverside-San Bernardino and Bakersfield. These are areas that were impacted dramatically during the for-sale sector’s boom-bust cycle, so in recent years they experienced sky-high foreclosure rates that pushed many former owners back into the rental pool.If you’ve been keeping track, we’ve now accounted for 9 of the 10 markets with the highest propensity to rent. The remaining area on the list might surprise you as it introduces another influence on the choice to rent versus own, in this case a really desirable one.
Dallas-Fort Worth’s propensity to rent figure comes in at 43.7%, eighth highest across the U.S., despite the fact that for-sale housing is much more affordable for the local populace than in most spots and that foreclosures are next to non-existent. What makes North Texas a notably renter-heavy market is the fast growth pace of the economy and the concentrations of major corporate employers found throughout a number of different pockets. Thus, Dallas-Fort Worth attracts lots and lots of newcomers, many of whom rent before they buy, and the existing populace is fairly mobile, with job changes – particularly among young adults – often spurring movement from one area of the Metroplex to another.
A couple of other metros where renters comprise an unusually high share of total households, primarily because of the fast growth of the economy and the dispersed locations of business centers, are Raleigh and Charlotte. While they don’t quite make the cut as top 10 areas for propensity to rent, the share of renter households is 4 to 6 points over the 36% national norm. Seattle-Tacoma falls into this big-growth category to some degree too, although it also is a place with fairly expensive for-sale home pricing.