The rental market in cities with booming car rental markets is so vibrant that people are turning to car rentals for the very first time, a new study finds.
The report, from the firm Zillow, says rental rates in Minneapolis and other cities with sizable car rental market have grown at nearly 10 percent a year in the past two years, the fastest growth in the nation.
In Houston, where the rental market is in its first year of growth, the market has grown 10 percent in just three years, Zillows said.
It also found that people renting cars and trucks are buying cars and getting rid of their old ones, and it found that new rental rates are rising in the suburbs and small towns in the Midwest.
It’s hard to say exactly why the rental markets have grown so quickly.
But experts say car rentals have been growing steadily in recent years, driven in part by new demand from consumers in the developed world who are turning their cars into long-haul, low-cost vehicles, according to the report.
The demand for the cars is likely driven by a growing middle class and increasing income inequality, said Zillower’s Kevin O’Connor, a co-author of the report and an economist at the University of Michigan.
The rental boom has led to more rental car purchases, which Zillowers calls a “trend.”
In addition, the report found that the demand for rental vehicles is expanding more quickly in cities that have higher median incomes than those with lower incomes.
That’s likely due to the fact that people who are living in poverty tend to rent out their cars to other people who don’t qualify for public assistance, and there are fewer of them, Zellows said in an interview.
But people who own cars are buying more of them as well, he added.
In Minneapolis, for instance, the rental rate rose 5 percent last year, while in Houston, the rate rose 8 percent, the ZillOW report said.
Cars are also increasingly popular in cities where renters are buying homes, the study found.
Renters who buy homes are buying their cars, and buying them new, Zilow said.
That means that people in Minneapolis, who are the largest renters in the country, are buying even more than they do in the rest of the country.
In New York City, where people own more than 90 percent of all cars, car ownership rates rose 8.2 percent last month, according the study.
The average rental rate in New York was $1,100 in July, up from $1.1 million in the first half of 2016, Zildner said.
In cities with high car ownership, Ziltner said, rental rates have been rising faster than in cities without high car ownership.
In Minneapolis, Zeltner said that the rental car market is “the largest in the U.S. for people who live in poverty,” with one-fifth of households renting cars, up by a quarter from 2015.
“It’s like the dot-com boom, only a little more dramatic, but it’s happening at a very, very high pace,” Zillowed’s O’Conner said of the rental boom.
Zilders co-authors include Laura M. Gee, a researcher at the Urban Institute; and John F. Tullis Jr., a senior economist at Zilloz.
Zillots report, titled “Home Renters in America,” was published last week in the journal Urban Affairs.
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