The national home ownership rate is currently at 75.0%, which leaves a quarter of Americans who are renting. According to a recent report from Pew Research, younger Americans in particular (those 35 and under) are far more likely to rent instead of buy.
According to the report, the total number of households in the U.S. grew by 7.6 million between 2006 and 2016. But over the same period, the number of households headed by owners remained relatively flat.
Meanwhile, the number of households renting their home increased significantly during that span, as did the share, which rose from 31.2% of households in 2006 to 36.6% in 2016. The current renting level exceeds the recent high of 36.2% set in 1986 and 1988 and approaches the rate of 37.0% in 1965.
Young adults — those who are younger than 35 — remain the most likely out of all age groups to rent. In 2016, 65% of households headed by people younger than 35 were renting, up from 57% in 2006. Rental rates have also risen notably among those ages 35 to 44. In 2016, about four out of 10 households (41%) headed by someone in this age range were renting, up from 31% in 2006.
Rental rates also went up among households headed by someone ages 45 to 64, rising from 22% of households in 2006 to 28% in 2016. But among the oldest Americans — those who are 65 or older — the rental rate remained steady at around 20%.
Looking at educational demographics, the report found college graduates to be the least likely group to rent. In 2016, 29% of college-educated household heads were renters, compared with 38% of households heads with a high school degree only or some college experience and 52% of household heads who did not finish high school.
The increase in U.S. renters over the last decade doesn’t necessarily point to a drop in the desire to own a home. In fact, in a 2016 Pew Research Center survey, 72% of renters said they would like to buy a house at some point.
About two-thirds of renters in the same survey (65%) said they currently rent as a result of circumstances, compared with 32% who said they rent as a matter of choice. When asked about the specific reasons why they rent, a majority of renters cited financial reasons.