As the housing market continues seeing higher home prices, strong demand and historically low mortgage rates, single-family rental inventory is growing at a faster pace than apartments in a majority of the nation's 30 largest cities, according to RentCafe.
While many distressed single-family properties were snapped up by investors during the housing crisis, only 2% of the more than 15 million single-family rentals on the market belong to large investment firms, while almost half, or 45%, belong to landlords owning just one unit, which could signify that homeowners are holding on to their homes, RentCare said.
With home values continuing to grow and mortgage rates at historic lows, move-up homebuyers may find it appealing to become landlords as costs to rent continue rising, meaning homeowners are able to maintain the mortgage on their original house while perhaps making a profit.
And with many would-be homeowners resorting to renting single-family homes due to challenges with affordability and tight inventory, single-family rental demand is especially high, which keeps the rent that landlords can charge high.
From 2007 to 2016, single-family rentals increased more than double the rate of multifamily rentals; single-family rentals rose 31%, or 3.6 million units, while multifamily rentals increased only 14%, or 3.2 million units.
Though mostly common in suburban areas, single-family rentals have strengthened in some of the nation's largest urban markets. In Phoenix, for example, the share of single-family rentals grew 77% between 2007 and 2016, the largest growth among large cities of that time period.
From Phoenix to Nashville, here's a look at the top 12 cities where single-family rentals are growing faster than apartment rentals. The ranking, compiled by Rentcafe according to Census Bureau data, is based off of increases during the 10-year period between 2007 and 2016.