Rate of Home Ownership is on the Rise

Mike Nelson
Mike Nelson

Rate of Home Ownership is on the Rise

After the downturn in 2008 and beyond we saw a significant increase in the ratio of tenant-occupied houses vs. owner-occupied.  The pendulum has swung back to normal.   From a low of around 61% of houses being owner-occupied, we are now back to almost 65% of houses being owner-occupied and 35% of houses are tenant occupied.

During the downturn, many owners were not able to sell for a price that would pay off their mortgage or they were not able to sell without taking a loss.  So between 2009 and 2014, many houses were added to the rental house pool across the country.  This led to many more A quality houses being available to rent.  Many tenants chose to rent these A quality properties rather than buy for a variety of reasons including the fact that it was cheaper to enjoy those nice houses as a tenant, without the obligation to pay for maintenance than to own them.  Now that the market has recovered many of those A quality landlords have sold those houses.  There are fewer A quality rentals available.  So many of those A quality tenants have turned into buyers again.

While more tenants are moving out to buy, more investors are moving in to invest in rental houses.  However, these investors are primarily targeting B quality and C quality rental houses.  So the number of rental houses have not changed much but there has been a more significant shift in the quality of rental houses available as A quality product is leaving the market and being replaced by B and C quality product.

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