Demographics – and therefore RealPage’s renter segmentation analysis – across the Sun Belt markets tend to differ more than the generally homogenous gateway market profile. After all, the Sun Belt is a larger geographic region encompassing far more markets than the six gateway metros. For this particular analysis, the following primary markets are classified as Sun Belt metros.
As noted in the previous RealPage renter segmentation analysis on the gateway markets, there is a well-defined dichotomy between Sun Belt and gateway markets – a dichotomous definition that has further developed over the past two years.
One of the pandemic-accelerated trends is that Sun Belt markets have attracted an ever-growing share of multifamily investment. A lot of this investment has been gravitating to the solid economic and demographic tailwinds that characterize this region. Still, the geographically large footprint of the region means there are some telling differences between markets within the Sun Belt region.
The Starting Out Singles cohort is the most common renter profile in the nation. This cohort makes up 32.8% of the nation’s renter base. This group is defined by their young median age (27, the lowest of the seven cohorts) and their lower-than-typical median income ($41,000, also lowest of the seven cohorts). In turn, this group is frugal, with their average rent ($987) running lowest of all cohorts.
As such, this group of renters tends to be concentrated most heavily in more affordable, blue-collar dominated markets. In fact, the highest concentration of renters belonging to the Starting Out Singles segment is in Memphis, TN. That cohort in Memphis makes up the largest cluster subset in any individual metro in the nation where some 51.8% of all renters can be classified as Starting Out Singles.
This particular renter segment boasting such a high concentration isn’t necessarily surprising considering Memphis is the nation’s third-most affordable market. Only Cleveland and Indianapolis feature lower average rents.
Similarly, Greensboro, NC ranks as the nation’s #4 most affordable market and has the second highest concentration of Starting Out Singles (46.7% of all renters). Other noteworthy Starting Out Singles cluster markets are San Antonio (#6 in the U.S.), Fort Worth (#8) and Jacksonville (at #11, just outside of the top 10).
Perhaps most noteworthy in the grand scheme of things though is that all but five Sun Belt markets (Orlando, Tampa and the trio of South Florida markets) all have a slightly-to-significantly-larger share of Starting Out Singles renters than the U.S. overall.
All considered, this cohort aligns fairly well with the more affordable, mostly blue-collar dominated group of markets across the nation’s Sun Belt region.
The nation’s second largest group of renters – Roommates by Necessity – comprises 22.8% of all the nation’s households. Within the Sun Belt markets, this cohort shows a heavy inverse correlation to the Starting Out Singles counterpart.
That relationship is easy to dissect. In short, more affordable markets have less of a need for households to double up with a roommate. It is actually the nation’s most expensive markets (San Francisco’s Bay Area or Southern California) where roommates are more likely to be concentrated.
What that means for the Sun Belt, however, is that there just aren’t nearly as many Roommates by Necessity households. Only Orlando, the South Florida trio of markets, and Phoenix show a much higher percentage of Roommate by Necessity households in the Sun Belt.
In those markets, that likely points to a slightly higher rent-to-income ratio among local households. Indeed, Miami (#8 highest rent-to-income ratio nationally), Fort Lauderdale (#11) and Orlando (#15) all post a rent-to-income-ratio that’s higher than the U.S. overall.
This could also be a byproduct of a higher concentration of lower-wage jobs (in service-sector industries) in those markets. Although Las Vegas counters that trend to some degree, we’ll see where the Las Vegas renter base makes up for a higher concentration of renters here shortly.
Turning to the third-highest concentration of U.S. renter households, we have Affluent Singles. Affluent Singles are a definitive “renter by choice” segment. Their median age (37.9) is second-highest among all cohorts while their median income of $100,000 is the highest. By and large, these are renters that prefer living in dense, urban areas.
As such, the Affluent Singles household type doesn’t tend to show up in many of the Sun Belt markets. After all, Sun Belt markets are generally the prototypical “urban sprawl” metros where urban core density just doesn’t factor in to the degree that it does in the more expensive coastal markets.
If there’s one exception, it’s the South Florida trio of markets once again that show up as somewhat counter to the region at large. Miami in particular is arguably the most urbanized of all Sun Belt markets, with a high share of pointing to a lot of density.
The nation’s fourth-largest cohort is the Independent Seniors cohort. This group of renters has the highest median age (56.5) and largely lives in older, smaller apartment communities where rents run below the norm (in fact, this group of renters has the second-lowest average rent among all cohorts).
Overall, Independent Seniors are relatively sparse throughout the Sun Belt markets – at least in comparison to the U.S. overall. Only four markets – Las Vegas, Memphis, Greensboro and Fort Worth – have a larger share of Independent Seniors. This is particularly noteworthy in Las Vegas, where some 22.1% of all renters qualify as Independent Seniors. That’s fourth-highest in the nation.
The Independent Seniors group tends to show the highest concentration in Midwest and Rust Belt markets. Pittsburgh (26.4%) and Detroit (25.1%) have more than one quarter of all renters belonging to this cohort. Other noteworthy clusters are Cleveland (#3 nationally), Milwaukee (#6) and St. Louis (#8).
The remaining renter cohorts (Established Married Couples; Families; Young Couples) each comprise roughly 5% of the nation overall, totaling about 15% of the nation overall. As the names would suggest, these tend to be households shared by a couple, and in the case of the Families cohort, oftentimes have children living in the home unit too (RealPage data shows 2.3 children per lease among the Families cohort).
Among the Sun Belt markets, there are a few noteworthy concentrations of these three individual groupings. South Florida in particular shows a significant concentration of Established Married Couples. Across those three metros, about 9% of all households are Established Married Couples. That’s about twice the national average for the same renter cohort. These households rank #3, #5, and #6 from top to bottom within the U.S.
Family households are fairly common in Orlando and Houston, which rank #7 and #9 in the U.S., respectively. Then finally, Austin, Tampa, Raleigh/Durham and Nashville tend to be hotspots for Young Couples, as those markets rank #6, #7, #11, and #12 respectively.
Interestingly enough, the four markets with the highest similarity to the nation overall are found in the Sun Belt. Charlotte, Dallas, Phoenix and San Antonio are the most similar to the national apartment renter makeup while the gateway markets are least similar and show a more homogenous makeup.
