Originally published by The Epoch Times. View the full article here. 
By Mary Prenon, Freelance Reporter

For decades, Americans seemed to follow a simple rule when it came to living arrangements: Rent an apartment in or near the city when you’re single in your 20s, then put down roots in your own home when you marry and plan to start a family in the suburbs.

Today, that rule is changing quickly, as 203 suburbs across the nation’s 20 largest metro areas have become renter-dominated.

A new report from Point2Homes, a national home search engine, notes that these flips to a renter majority have occurred over just the past five years.

The analysis of 1,500 suburbs with a population of more than 10,000 revealed that most residents in those areas are opting to lease rather than buy their homes.

In Texas alone, 18 suburban communities gained thousands of renters in the past five years. Frisco, Texas, tops the list with 10,213 new renter households during that period.

Point2Home analyst Doug Ressler told The Epoch Times that build-to-rent homes are more prevalent in areas where more land is available for development.

“The cost of land in Texas and in other areas in the western and southern regions of the country [is] also a lot less expensive than in the Northeast or coastal areas,” he said.

“In many cases, it’s not just younger people choosing to rent, but retirees as well, who don’t want to deal with all the costs of homeownership.”

Ressler said Frisco typically serves as a bedroom community for people commuting to jobs in the Dallas–Fort Worth metro area. As suburban development from Plano, Texas, has extended into Frisco, a new population boom has made it one of the fastest-growing suburbs in the country.

A three-bedroom, two-bath, 1,786-square-foot home in Frisco, Texas, renting for $2,495 per month. (Courtesy of Point2Homes)

A three-bedroom, two-bath, 1,786-square-foot home in Frisco, Texas, renting for $2,495 per month. Courtesy of Point2Homes

Two other Texas suburbs—McKinney and Grand Prairie—each added more than 5,000 renter households. Both are part of the Dallas–Fort Worth metroplex and rank among the fastest-growing suburbs in the area.

Johnny Mowad, president of the Metro Tex Association of Realtors, told The Epoch Times that renting can be a smart choice in the short term.

“I’ve seen many clients, particularly young professionals and newcomers to [the Dallas–Fort Worth metro area], use renting as a strategic tool to get ahead because of its predictable monthly costs,” he said.

Mowad said that while renting can be a viable stepping stone, buying a home remains the “smartest” long-term wealth-building decision people can make.

The MetroTex Association primarily serves the Dallas–Fort Worth metro area in North Texas, covering a large region that spans about 60 miles east to west and north to south.

Mowad noted that almost 8,500 single-family rental homes are currently under construction across the region.

“These communities offer the space, privacy, and amenities of suburban life without the long-term mortgage commitment,” he said.

“However, I’ll always champion buying a home as the best long-term investment, especially here in [the Dallas–Fort Worth metro area]. When you own, you’re not just paying for a place to live; you’re building equity in an asset that tends to grow as our region grows.”

Because of the region’s expansion and popularity, Mowad said, homeownership provides stability and an opportunity to benefit directly from home appreciation.

“It’s like a forced savings plan—every mortgage payment plants a little more stake in your own future,” he said.

Mowad views the rise of suburban renters as a positive sign of a flexible and evolving housing market. He believes that many are using it as a springboard to get their finances in order and will consider purchasing a home when they’re ready.

“In the big picture, I see today’s suburban renters as tomorrow’s homeowners,” he said.

With strong job growth in the Dallas–Fort Worth metro area, Mowad noted that more people are continuously moving into the region from other parts of Texas, as well as from other states. Some work directly in Dallas or Fort Worth, while others are taking advantage of hybrid or remote work options.

Ressler pointed to these types of work options, along with limited monthly budgets, as additional reasons for the rise in suburban renters.

“Many home purchases are still out of reach for young couples and families, and they’re choosing to put their money into other investments and enjoy a less stressful lifestyle,” he said. “Generation Z (ages 18 to 28), in particular, doesn’t want to be tied down to housing costs, and they don’t want to spend the majority of their time there.”

A recent report by HomeAbroad found that renting was nearly 60 percent less expensive than buying across most of America’s top 100 cities.

According to Ressler, single-family home renters prefer more space and privacy and can save more money compared with renting a typical apartment in a major city.

“It’s a shift in how Americans today are thinking about housing,” he said. “Younger people also like the flexibility that renting offers without being tied down to a long-term mortgage.”

Cudahy, a city in Los Angeles County, currently holds the top spot with the largest share of renters at 88 percent. Only five other U.S. suburbs—Addison and Webster in Texas; University in Hillsborough County, Florida; Clarkston, Georgia; and Harrison, New Jersey—have renter shares exceeding 80 percent.

Sergio Altomare, CEO and co-founder of Hearthfire Holdings, a private equity firm, spent more than 22 years in finance with the Federal Reserve. He blames the financial and housing crisis from 2007 to 2009 for creating the current situation, in which renters are beginning to outnumber buyers.

“When the housing bubble exploded, interest rates were lower and there was a lot of capital that flooded the markets,” he told The Epoch Times.

“Many large investment firms started to change their focus into institutional homebuying. As a result of the affordability drop, the younger generations are seeing renting as a more viable option.”

Now, Altomare noted, home prices are outpacing wages, while the starter home supply has dropped significantly.

“Even those with high-paying salaries still can’t afford the down payment to buy a home,” he said.

On the other side, developers tend to make more money building a 100-home rental community than building and selling each house individually, according to Altomare.

“With renters, there’s always a continuous cash flow,” he said. “And build-to-rent homes often have less expensive finishes, so they’re saving a lot of money on the construction.”

Altomare fears this could eventually affect the local economy.

“There could be a reduced investment in schools, and also a shift in voter behavior as renters may not have a big stake in what’s going on in the local community,” he said.

While predicting that build-to-rent communities will continue to grow, Altomare believes that they won’t completely replace the buy-and-sell real estate market.

“Places like the Sunbelt may have a higher proportion of renters because of land availability and perhaps vacation homes, but I personally don’t see a majority of America’s homes being rented,” he said.

Altomare suggested that municipalities provide incentives for first-time homebuyers to “help level the playing field” and create a more balanced housing market.