Home price appreciation is preventing consumers from entering the housing market, forcing an accelerated number of potential homeowners to rent.
In 29 of the nation's 50 largest cities, the majority of households are renters, according to Zillow. But, in 2006, during the lead-up to the financial crisis, only 16 of the biggest cities were dominated by renters rather than homeowners.
Across the country, 36% of households rent, compared to just 31% in 2006.
"The share of U.S. households that rent surged in the wake of the Great Recession, as millions of families were foreclosed upon and younger adults either chose to or had no choice but to rent for longer. Renting remains more common years after the recession ended and after a historically long national economic expansion," Aaron Terrazas, Zillow's senior economist, said in a press release.
"Some of this shift is attributable to lifestyle choices, including young adults delaying marriage and starting families, and a strong preference for living in urban cores where renting is often more convenient and financially feasible. Some is also driven by economic necessity — quickly rising home values can make it difficult for some to enter the market to begin with — and many previously foreclosed-upon families remain unable to purchase again, even years after foreclosure," said Terrazas.
While the homeownership rate is rising, its growth is slow. Young adults have increasingly become homeowners particularly over the past two years, but it will likely take many years for the homeownership rate to hit prerecession peaks should it ever return.
Property values are rising at an annual rate of 8%, and the median rent over the past year is up 1.3%, according to Zillow.
The data is derived from a Zillow report analyzing the change in renter households between 2006 and 2016.