The Differences Between SFR and Multifamily Renters

Apartment List recently looked at the differences between the people who choose build-to-rent/single-family rentals and multifamily properties. Some of it is demographics, some desired lifestyles, and some, location.

There are many renters in multifamily, but also in single-family construction. “Already there are 43 million Americans living in rented single-family homes, representing over 40 percent of all renters across the country,” Apartment List wrote, citing data from the 2022 Census Bureau’s American Community Survey. “An additional 58 million renters live in multi-family rentals (i.e., apartments), and unsurprisingly, the two groups have different geographic and demographic profiles.”

The 43 million single-family renters represent about 14 million households (an average 2.85 occupants per unit in 2.79 bedrooms per unit) while the 58 million in multifamily buildings are 28 million households (about 1.99 occupants per unit and 1.59 average bedrooms per unit). “Single-family homes are associated with suburban living, while apartments tend to be concentrated in denser metropolitan regions,” they write. The inherent differences between suburban and metropolitan areas help explain why there is so much more space in SFRs and BTRs — there isn’t enough room in most metros to provide the amount of space necessary for three-bedroom construction.

Only about 23% of the SFR/BTR households are single person, compared to 47% of multifamily. But the median age of the household held is roughly the same: 43 for the former, 41 for the latter. And, as one might expect, 42% of the SFR/BTR households have children, compared to 23% of the multifamily.

Median household income in SFR/BTR is $56,657, while for multifamily it’s $44,847. The rent burden rate — percentage of households paying more than 30% of their income for rent — for SFR/BTR is 43%, while it’s 51% for those in multifamily rentals.

Both incomes are considerably lower than the 2022 U.S. overall median household income of $74,580, which includes many household owners. Take the homeowners households and renter households alone and the median income comparison between them is $93,531 to $56,657.

Another big difference is geographic concentration. Large amounts of the Upper Midwest and New England see few single-family rentals because of the lack of open space for construction in and near cities. They are far more common in the southern and western U.S. because of more available land. About 80% of BTR construction took place in these areas last year.

“California stands out as the national epicenter for single-family rentals,” they wrote. “Of the 15 metros with the highest rates, 10 are located in the state. And the rate frequently jumps above 30 percent in California’s Central Valley, a farming region where homeownership is particularly expensive relative to agricultural incomes.”