Owning a home is the primary mechanism for building wealth and economic mobility, said Carolina Reid, co-author of the Terner study. Without wealth, how do you pay for your kids’ college education or create a better life for your heirs, she asks.
“It certainly is contributing to a significant loss of wealth to these individuals and communities,” Reid said of the rental house increase. “That’s deeply troubling.”
Leasing Lifestyle: The Inland Empire, which was ground zero for the foreclosure crisis, had the biggest gain in rental houses: Detached, single-family rentals increased 50 percent in San Bernardino County and 45 percent in Riverside County, census figures show.
In Orange County, detached rental houses jumped 44 percent in the most recent decade, followed by an 18 percent increase in Los Angeles County.
The reasons behind this trend are varied, experts said, but the aftermath of the foreclosure crisis is a key component.
Millions of homeowners became renters, leaving more than 8 million U.S. homes available for investors to snatch up. The Terner Center study found nearly 27 percent of single-family renters who had been homeowners had lost a home to foreclosure.
Other factors include student and consumer debt, difficulties in qualifying for a mortgage, or not being able to save for a down payment.
The rise of the millennial also is a contributing factor.