With home prices and interest rates rising, many renters feel the American Dream is more out of reach than ever. But that isn’t preventing them from moving to the ’burbs. A new analysis from RentCafé found that the number of suburban renters increased faster over urban renters in 19 out of 20 major U.S. metro areas between 2011 and 2015. Remarkably, the suburbs of St. Louis, Atlanta, Boston, and Riverside, CA, each attracted three times the number of new renters than their cities’ urban cores.
So what’s the deal? The most likely driver of suburban rental growth is the price tag: in 18 of the 20 metro areas studied, rents were cheaper in the suburbs by an average of 11 percent. That translates to a month’s rent.
During the foreclosure crisis, the number of single-family suburban rental homes spiked by more than 40 percent as investors were able to pick up foreclosed abodes at bargain rates. Those rentals might otherwise be affordable starter homes for aspiring buyers. The lack of inventory drives up home prices and makes it more likely that a family will continue renting.