Do you rent an apartment in metro Atlanta? If so, you’re likely to notice that rental rates have been on the rise lately – along with pretty much everything. This post is the second in a 3-part series that will take a closer look at Atlanta’s rental rates in the housing market using a variety of data sources and visualizations.
In part 1 of this series, we saw how the Zillow Observed Rent Index (ZORI) showed metro Atlanta’s residential rental rates to be increasing since the start of 2020. In this installment of the deep dive into rental rates, we consider Esri’s proprietary national rental index which is set to a base 100, representing the national average. For our area, Fulton County features the highest countywide rental index of 181 (corresponding to 81% above the national average), while Henry County’s index is the lowest at a 73 (or 27% below the national average).
We consider this metric for the 11 metro counties in conjunction with two additional demographic categories: income and age. While we may expect higher rental rates to correlate with higher incomes, would a greater population share of Millennials also correlate to higher rental rates? Or perhaps would a larger share of older generations, such as Baby Boomers, correlate to higher rental rates? The answers to these questions may surprise you! Read on to explore the data and findings.
Rental Index vs. Median Household Income
The interactive bubble chart below shows the Esri Rental Index for all 11 metro counties (along the y axis) versus the median household income (along the x axis). The size of each bubble corresponds to the number of renter-occupied housing units for each county. In this way, we can easily visualize the hierarchy and magnitude of the ‘Big Four’ counties of Fulton, DeKalb, Cobb, and Gwinnett, home to the largest number of rental units.
Perhaps surprisingly, we don’t see much correlation between higher median household incomes (like those in Forsyth County) and higher rental indices. In fact, the highest rent indices are found in these ‘Big Four’ counties which are decidedly middle-of-the-pack when compared to the other metro county incomes. These four counties feature median household incomes which range from roughly $70,000 to roughly $90,000. Clayton County features the lowest median household income at roughly $55,000 and a rental index of 84. This index is only slightly lower than Forsyth County’s rental index of 89, yet Forsyth County boasts far and away the highest median household income of the group at nearly $120,000.
While we might expect high earners to be able to afford home ownership and thus be less likely to rent, this does not always prove true. As a linear relationship does not appear to exist between these variables, we cannot say with confidence that income is correlated to rental prices based on the data shown here.
Isolate a single county above by double-clicking on the county name in the legend box. You can then single-click additional counties for comparison. Finally, double-clicking the legend will reset the visual to all 11 counties.
Rent index vs. Millennial population
Now things get interesting. The following bubble chart plots the countywide Esri rental index (still on the y axis) versus each county’s population share of Millennials (x axis). Unlike with income, a positive correlation (albeit a somewhat weak one) appears to relate these two variables. Fayette County, home to the lowest Millennial population (as a percent of the total population) also has a relatively low rental index of 81. Meanwhile, Fulton County features the highest rental index and the greatest population share of Millennials of any county in the metro area. As with income, we once again see Atlanta’s ‘Big Four’ aligning vertically: Fulton, DeKalb, Cobb, and Gwinnett Counties feature similar population shares of Millennials, from roughly 26% to just over 28%. Henry County, with the region’s lowest rent index, has a Millennial population just over one-quarter of the total.
Although certainly one factor among many, it appears that counties with large proportion of Millennials also feature greater rental rates. This could be due to more demand among the cohort, as a whopping 1 in 4 Millennials say they never plan to buy a home.
Note: Esri defines Millennial as a person born between 1981 to 1998.
Rent index vs. Baby Boomer population
When plotting the Baby Boomer generation, we see a somewhat inverse relationship to the rental index as compared to Millennials: those ‘Big Four’ counties feature a relatively low percentage of Baby Boomers and, generally, feature lower rental indices. This is especially true when compared to counties like Rockdale and Fayette (comprised of roughly 21% and 25% Baby Boomers, respectively), which have lower overall rent indices. Clayton County, home to the lowest percent of Baby Boomers among regional counties, also features a relatively low residential rental index of 84, or 16% below the national average.
This finding may point us towards the conclusion that Baby Boomers are less likely to rent than Millennials, thus leading to less demand for rental units. While this relationship appears somewhat weak, and more data would be needed to conclude anything definitive, it appears that age, and not income, is a more important factor when considering the price of rental housing in metro Atlanta.
Note: Esri defines Baby Boomer as a person born between 1946-1964.
Stay tuned for our final installment in this mini-series! We’ll be looking at these same categories but in a geospatial context and at a Census tract level.