Many aspiring homeowners are flocking to the suburbs to find lower home prices and more affordable costs of living, and it seems that renters are following suit, according to RentCafe’s newest study.
RentCafe analyzed Census ACS data ranging from 2011 to 2015 and found that suburban areas were outpacing urban areas in renter growth in 19 out of the 20 largest metros across the U.S.
In the 20 metros studied, suburban renter household growth was about 700,000 — 100,000 households more than seen in urban areas (600,000).
St. Louis; Atlanta; Riverside, California and Boston saw the biggest booms, with renters choosing suburban areas three times more often than urban ones.
In Atlanta, which took the No. 1 spot, suburban areas experienced a 26 percent gain in renter households while urban areas only experienced 10 percent growth.
In Riverside, suburban areas experienced a 23 percent gain in renter households versus a 13 percent gain in urban areas.
The only city that maintained greater urban renter household growth was Philadelphia, which experienced 5 percent growth while the suburbs only grew by 3 percent.
So, why are renters leaving the bustling urban areas in favor of a slower suburban pace? Two words: lower rent.
RentCafe says that although the situation varies from city to city, most renters are able to find some kind of savings by moving outside their city’s epicenter.
On average, New York metropolitan renters can save $1,600 a month by moving to the ‘burbs. Boston renters can save $800 a month, Chicago renters can save $500 a month and San Francisco renters can save an average of $450 a month.
In other areas, such as Dallas, Houston and Denver, the savings are much less.
St. Louis renters only save an average of $12, but moving to the suburbs can still give renters more wiggle room in choosing properties with more space and the same luxuries seen in downtown areas thanks to new builds.
Builders are beginning to construct luxury apartments in suburban areas, offering the same amenities seen in high-rises and posh condos.
But builders would be smart to up their building pace to meet the needs of renters — only 180,000 suburban apartments were built in those 20 metros versus 300,000 in urban areas.
“However, many experts are saying that suburban apartment markets are poised to become the next hot thing in multifamily,” noted RentCafe researcher Nadia Balint.
“These demographic changes are definitely pointing in that direction, and we expect to see a boost in suburban apartment construction in the upcoming years.”
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