Soaring cost of homeownership has sent droves of renters into the suburbs in search of affordable housing alternatives. Mark has been a stable renter for the past three years. Now, he’s unable to afford a home in the neighborhood he wants to live. He expressed his frustration, stating, “If I want to stay here, it’s basically not tenable.” As affordability challenges remain, suburban rental markets are booming, likely forcing renters even farther from urban core neighborhoods.
Tara Raghuveer, national director of the Tenant Union Federation, stresses that these trends deeply affect the social fabric of communities and their dream potential. She notes that as people move farther from city centers, they may face challenges related to transportation and social services. “As people are moved out of the city, they’re further from transportation, they might be further from employment,” she explained. This dramatic shift raises troubling questions about the long-term effects burdening isolated families and communities.
In the six suburban counties that immediately surround Dallas, homebuying is now much more difficult than in Dallas County. The analysis shows that from 2018 to 2023, 15 of these suburbs went from majority-homeowner areas to areas where more than half the households rent their homes. This shift is part of a larger pattern occurring in five major metropolitan areas. Suburbs, like those in Dallas and Minneapolis, are pulling renters at a breakneck pace compared to metros.
Mark’s experience is shared by Andrew Decker, a Lake Villa, IL renter who struggles with rental home mom-and-pop landlords. Decker would like to purchase the 11-acre property he now rents, recently listed at $340,000. He stated, “We would like to make it our forever home if we could afford it, but it’s just so expensive.” At that price Decker thinks he would buy the house right away if it were available for $200,000. “If they were to come at me and tell me that, ‘Hey, you can buy this house for 200 grand today,’ I’d pull the trigger tomorrow. I wouldn’t even hesitate. But 340’s crazy,” he remarked.
The pandemic-fueled demand for housing has drastically changed the calculus of suburban life. According to George Ratiu, vice president of research at the National Apartment Association, many renters appreciate the simplicity of leasing. “The ability to have one payment that covers all your expenses generally — you don’t have to deal with the mortgage payment and the home insurance and maybe the HOA and then a lot of maintenance expense,” he noted. For those for whom financial security is paramount, this convenience can make renting a more appealing option.
The new trend of “suburban downtowns” has played a big role in this recent move as well. Jay Parsons pointed out that the pandemic-era transition to remote work has allowed individuals to seek homes in suburban areas while maintaining proximity to their jobs and amenities. You can still be near your place of employment. You can be close to nice restaurants and shops but live in a suburban area where you’re still using a car, he explained. This unprecedented flexibility has unlocked the door to opportunity for numerous renters. Today, they’re able to live more affordable lives while living beyond historic cores of cities.
Those statistics highlight the growing importance of this trend. From 2018 to 2023, rentership increased by a minimum of five percentage points in 11 of those 20 suburbs surrounding the densest, most populated U.S. metro areas. In Dallas suburbs alone, the share of residents who rent jumped up by 17.6% over this time. This substantial growth indicates that individuals are increasingly drawn to suburban living as they navigate financial constraints in urban environments.
The economic situation today makes these challenges even greater. Average interest rates on the 30-year fixed home loan, America’s most common mortgage product, are nearing 7%. That’s the highest it’s been since just before the 2008 financial crisis, making homeownership less affordable by the day for would-be buyers.
As the demand for rentals in these suburban locations grows, experts expect the dynamics to change even more. Parsons stated, “That’s a dynamic that’s going to have to work itself out a little bit more before we know the final impact on suburban versus downtown pricing.”