Phoenix sees sharp increase in families renting rather than buying homes

It’s not only singles putting their dreams of owning a house on hold.

The Phoenix metro has seen a 42 percent increase in families with children renting during the past decade, according to RentCafe, a nationwide apartment search website.

This increase translates to 70,000 more families who are renting, according to data from the report. The report also shows the number of families that owned homes in Phoenix dropped by 12 percent during the past decade.

Nationally, one of the most surprising finds was the large increases in the number of families renting in southern metropolitan areas such as Phoenix, Houston, Atlanta and Miami, the agency said.

In the past decade, the number of families across the country who own their home has decreased by nearly 3.6 million, according to U.S. Census Bureau data. At the same time, the number of families who are renting their home has increased by 1.9 million.

The agency said the current economic climate, declining birthrate and high cost of raising children are not helping families become homeowners.

Steve Gebing, senior managing director of Institutional Property Advisors, said household formation is driving more people to rent, rather than own, homes.

“Today, you see married couples with children shrinking at a faster pace than it ever has,” he said. “Single households are driving the majority of the growth.”

It’s also pushing developers to increasingly invest in apartments in the Phoenix area, with $1.4 billion worth or projects currently under construction around the Valley.

In Phoenix, between 2013-2015, the median price of a single-family home increased by 45 percent and average rent grew by 39 percent, according to RentCafe.

The agency noted Phoenix has high demand for family-size rental houses, and 55 percent of apartments built during the past decade are family-sized, including up to four bedrooms.

In its report, RentCafe analyzed rental trends for the 30 largest metropolitan areas between 2006 and 2016.

By Adrian Marsh