The 2009 American Housing Survey & Recent Mover Renters Part I: Overview and Previous Units

More renters moved in the 12-month period before March 2009 than at any time in the previous decade, and they were more likely than in previous years to be moving out of a house, and/or to a situation where their housing costs decreased with their move, according to the first published data from the 2009 American Housing Survey.   The American Housing Survey (AHS), conducted every two years by the US Census Bureau and the Department of Housing and Urban Development (HUD), surveys American housing conditions and the behavior and perceptions of Americans regarding their housing.

Overview

In 2009, according to the AHS, there were 130.1 million housing units in the United States, of which 4.6 million (3.5%) were designated for seasonal occupancy. Of the 125.5 million housing units designated as year-round occupancy units, a total of 111.8 million (89.1%) were occupied and 16.7 million were vacant, a vacancy rate of 10.9%. This is the highest overall vacancy rate recorded in the 2000s, up from 10.6% in 2007.  A total of 76.4 million households (68.4%) were in owner-occupied units and 35.4 million (31.6%) were in renter-occupied households. The homeownership rate is up slightly from 68.3% in 2007 and down from the high of 68.8% recorded in 2005.

Of the 35.378 million renter households recorded in 2009, a total of 12.422 million (35.1%) had moved in the previous 12 months. This is the highest recent mover rate recorded by the AHS in the 2000s. The following table documents total rental households and movers for the decade of the 2000s:

Renter Households (000)
2009 2007 2005 2003 2001
Total Renter-Occupied Households 35,378 35,045 33,940 33,604 33,727
Recent Mover Households 12,422 12,100 11,839 11,259 10,951
Percent Recent Mover Households 35.1% 34.5% 34.9% 33.5% 32.5%

Renter households who had moved in the year prior to the survey were asked a variety of questions about their move, including why they moved, how their housing costs changed, and how their new neighborhood and house compare with their old neighborhood and house. We compared the answers to the 2009 survey with those from previous surveys to see if we could identify whether renters are moving for different reasons, as well as how the popping of the housing bubble might be affecting the rental market.

Previous Units

We’ll start our profile by examining the units that recent mover renters are leaving behind. The following chart illustrates historical trends in the percentage of recent mover renters who come from a house or apartment:

As the chart illustrates, a higher percentage of recent mover renters just vacated a home, rather than apartment, a trend that began in 2007 and accelerated substantially in 2009.  Although the American Housing Survey does not provide cross-tabulations that would allow more detailed profiling, it is highly likely that this is a result of the recent spike in foreclosures.

The following chart illustrates the percentage of recent mover renters who are moving from a home which was previously owner-occupied.

As the chart illustrates, the number of recent mover renters moving out of an owner-occupied home is the highest it has been in 20 years.  It is likely that some of these movers are first-time renters moving out of their parents’ home or a house rented near campus or senior households downsizing from ownership into rental.  However,  economic downturns have a tendency to negatively impact household formation, as people often defer moving out of roommate situations, form roommate situations or defer buying a home due to economic circumstances.  Given the combination of economic downturn and increased foreclosures, we believe that the high number of foreclosures is likely the primary driver pushing people to leave owner-occupied houses for rental situations.

The following chart illustrates the percentage of recent mover renters who left a house and how many of those recent mover renters are now in a house:

As the chart illustrates, the percent of recent mover renters ending up in a house has increased to its highest level since 1999.  However, it has not kept up with the number of recent mover renters moving out of a house.  The gap between recent mover renters moving out of a house and those moving into one was 15.1% in 2009, the highest in the last 20 years.  A couple possibilities exist for the growing gap:

  • Although more houses are in the rental pool than ever due to foreclosures, as the high number of recent movers in houses illustrates, foreclosures have also forced a lot of homes out of the rental pool as well.  Households in need of a home due to a foreclosure may not be able to quickly find a house that suits their needs in their price range.  In order to minimize the disruptions to their household (keep the kids in the same school district, stay close to their job/family/church, etc.), such households may choose an apartment which can be made available quickly.
  • More and more apartments have entered the market that exhibit the characteristics of single-family homes, particularly at the high end. More and more we are seeing ranch-style apartments designed with more square footage, limited common walls and attached garages that mimic single-family homes.  Many households currently in a house can step down their home payment into such a rental unit.

In general, though, households who are moving from a house were in a house for reason, and many of them would prefer a house if the economics permit it.  With more potential renters coming out of houses, apartment leasing agents may have to sell potential tenants not only on their particular rental unit, but also on the advantages of renting an apartment over a home. Those advantages might include not having to do any grounds maintenance (lawnmowing, snow shoveling), and project amenities such as a swimming pool and exercise room.

Change in Housing Costs

Renters who moved from a house, apartment or manufactured/mobile home from within the United States were asked how their housing costs had changed with the move.  The following chart illustrates how recent movers compared their relative housing costs over the last 20 years.


As the chart illustrates, the percentage of recent mover renters decreasing their housing cost is at its highest point in 20 years.  This also tends to reinforce our belief that the foreclosure crisis and the downturn in the economy are driving people into rental situations who would prefer not to be there.

When combined with the number of renters for whom housing costs stayed about the same, this represents over half (52.7%) of all renters for the first time in 20 years. As a result, it is critical for those managing and marketing rental housing to sell potential residents on the value represented by your community.  More renters are moving and they are focused on value.

In addition, the high number of renters who decreased housing costs or whose housing costs remained the same is an indicator that management should be particularly careful in considering rent increases. Poorly considered rent increases can increase turnover in two ways.  It may price a property out of consideration from its traditional step-up support base of renters in lower-priced, lower-quality rental units as fewer renters look to increase their housing costs. A rent increase may also make lower-priced properties with similar or slightly lesser amenity packages seem more of a value to renters who are looking to decrease their housing costs, thus providing current renters with a better opportunity to step-down their housing costs.

Next: Part II – Reasons For Leaving Previous Unit

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  1. Pingback: Recent Mover Renters: American Housing Survey Part II – Why Renters Leave Their Previous Unit « Danter Company Blog

  2. Pingback: Recent Mover Renters – American Housing Survey 2009 – Neighborhood Selection | Danter Company Blog

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