SEATTLE—Apartments aren't the only cause, or beneficiary, of the trend toward renting rather than owning. Zillow said Wednesday that the number of homes that would sell in a single year is down by about 5% compared to 2006, due largely to demand for single-family rentals. Hundreds of thousands of homes that may have otherwise sold in a typical year over the past decade– particularly more-affordable homes—have instead been taken off the market and converted to rentals, a trend that exploded in popularity in recent years and is only now beginning to level off,” according to Zillow.

In large measure, that's because SFRs tend toward the less expensive end of the housing market, i.e. where first-time homebuyers would gravitate, thereby limiting these buyers' options and driving up prices. The inventory of SFRs grew by about 5.4 million between '06 and early 2017, while at the same time new construction was occurring at a slower pace.

Over the past five years, the homes being bought and converted to rentals increasingly have been what in any other market would be considered starter homes. Nearly 40% of rented single-family homes bought since 2012 are among the most affordable, compared to 34% of SFRs that were bought prior to the housing market crash. The share of single-family homes being rented out increased from about 13% in 2007 to a high of 19.2% in 2016; it has since leveled off slightly to 18.9%.