News & Trends

Trend Report: The Affordable Housing and Homeownership Protection Act, Single-Family Vacancy Rates, Features to Make Co-Living Easier, and the Gap Between Renting and Buying Affordability

February 20, 2024

Let’s take a look at a few trends affecting the single-family property management industry, including the introduction of the Affordable Housing and Homeownership Protection Act, a look into how single-family vacancy rates for 2023 compare to pre-pandemic levels, a new way to list on Zillow, and a look at the gap in affordability between renting and buying across the nation.

The Affordable Housing and Homeownership Protection Act

25% of single-family rentals were owned by non-individual investors in 2021, up from 17% two decades earlier. Furthermore, according to CoreLogic, in March 2023, investors accounted for 27% of all single-family home purchases; by June, that number was almost unchanged at 26%. In an effort to make housing more affordable for American workers, Senators Tina Smith (D-MN), Jack Reed (D-RI), and Tammy Baldwin (D-WI) are teaming up with several colleagues to introduce the Affordable Housing and Homeownership Protection Act.

If passed, this act would tax investors who purchase and hold more than 15 single-family homes, with the largest institutional investors paying the highest rates set at: 1 percent of purchase price for investors who own 16 to 25 single-family homes; 3 percent of purchase price for investors who own 26 to 100 single-family homes; and 5 percent of purchase price for investors who own more than 100 single-family homes.

Single-family rental vacancy rates returning to pre-pandemic levels

According to the U.S. Census Bureau, quarterly single-family vacancy rates remained relatively steady throughout 2023, ranging from 5.5% to 5.6%. While vacancy rates dipped to 4.7% early in the COVID-19 pandemic, the Q4 2023 vacancy rate is on par with the pre-pandemic 5.6% quarterly average of 2019.

Filter by individual room listings

The trend of co-living isn’t expected to slow any time soon. In an effort to make the leasing process easier for renters and property managers, Zillow has released a feature that allows users to search for individual rooms. 

Beta testing for this feature launched in November, and ahead of the official release on February 8th, there are already an estimated 10,000 single-room listings nationwide.

A look at the gap between renting and buying

ATTOM recently released their 2024 Rental Affordability Report, which has concluded that the price of renting a median three-bedroom home is more affordable than owning a similarly-sized home in 90 percent of U.S. markets.

While both renting and owning have become more challenging for American workers in recent years, median rental rates require a smaller percentage of average wages than home-ownership expenses in most cities. Changes in three-bedroom rents in the past year ranged from 3 percent decreases to 15 percent increases, while changes in median sale prices for single-family homes last year ranged from 3 percent losses to 7 percent gains.

It’s no surprise that the most densely populated counties had the largest discrepancy between renting and owning, the biggest gaps being in Honolulu, HI, Brooklyn, NY, and Oakland, CA. The only two markets with over 1 million residents where it is more affordable to buy than rent in 2024 are Riverside County, CA, and Detroit, MI.

Among 64 markets where median three-bedroom rents require less than one-third of average local wages, 59 of them are in the Midwest and South. This finding closely aligns to the most affordable home ownership markets, with the top three markets being Detroit, MI, Montgomery County, AL, and St. Louis, MO.

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