The migration from cities to single-family rentals in the suburbs was once just anecdotal. But recently, several reports have come out to emphasize this trend.
The latest is the Single-Family Rental Market Index produced by The National Rental Home Council and John Burns Real Estate Consulting. It found that 59% of new single-family rental home residents relocated from urban residential environments in the third quarter.
The index is designed to measure the single-family rental home market’s relative health by evaluating key leasing activity, household occupancy, and anticipated demand. Fueled by growing numbers of individuals and families transitioning away from urban residential locations, the index hit 74.4 in Q3, the second-highest level on record after the 2Q 2020 reading of 76.3.
While demand is rising for single-family rentals, the average rental rate for single-family rental homes remains below the average monthly mortgage cost for owner-occupied single-family entry-level homes, according to the report.
“Single-family rental homeowners reported in the survey that 25% of resident move-outs were a result of a home purchase, consistent with historical trends for departing residents. Additionally, 53% of owners reported homes leasing more quickly than one year ago, with overall market occupancy reaching 97%,” said David Howard, executive director of NRHC, said in a statement.
Multiple studies have well documented the push to relocate to the suburbs amid the pandemic.
A recent study by Upwork found that migration from dense cities has become a significant trend during the pandemic, and one of its drivers has been housing affordability.
Among the 20,000 Americans polled by Upwork, between 14-23 million of US households plan to move, in many cases out of major cities and into less expensive housing markets. Over half (52.5%) of those surveyed are planning to move to a house that is significantly more affordable than their current home
Another indicator of the exodus to the suburbs comes from Redfin, which finds that the median home-sale price in car-dependent neighborhoods—that is, homes in the suburbs—rose 14.9% year over year to $345,000 in October. That’s the most significant increase and the highest price since Redfin and Walk Score started tracking this data in 2014.
“With restaurants, bars and shops temporarily or permanently closed due to the pandemic, much of what makes walkable neighborhoods so desirable and valuable has been diminished this year,” said Redfin chief economist Daryl Fairweather in a statement. “Even though walkable, urban neighborhoods aren’t as hot as suburban and rural places this year, low mortgage rates have continued to fuel voracious homebuyer demand just about everywhere.”