Research shows renter demand and preferences have shifted significantly post-pandemic
Renters Say Their Priorities Have Changed But Landlords Aren’t Keeping Up
A survey of current and prospective renters reveals a gap between what they want in an apartment and what developers and landlords are providing.
Based on a national survey of 2,342 prospective renters, the findings were compiled by RCKRBX and published in its inaugural National Renter Demand Index.
“Our research shows renter demand and preferences have shifted significantly post-pandemic while existing supply and new construction/recent deliveries remain out of sync with what renters want and how these markets will continue to evolve,” said Michael Broder, CEO & Co-Founder of RCKRBX.
Almost half (46%) of the prospects said they would increase their budgets when they next move, especially workers with more flexible work arrangements, as well as younger, economically mobile seekers willing to consider new housing options and redefine their priorities. Just 20% planned to seek lower rents and 17% were committed to renewing their leases.
Apartment size is one key point of difference between what’s wanted and actually offered. The study found a large untapped and underserved demand for two and three-bedroom units at competitive and premium rental rates – a mismatch expected to increase over the next three years.
It cited some examples. Just 4% of renters wanted studio units, while there was a 12% supply. Similarly, there was a 41% supply of one-bedroom units but demand for just 21%. On the other hand, the supply of two-bedroom units stood at 39% compared to a 52% rental demand. The mismatch between the demand and supply of three-bedroom units was even greater: 23% versus 8%.
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Renters, of course, are far from a homogeneous group. Their rental choices are usually based on economic conditions, lifestyle or job requirements, whether they are ready to settle down, and whether they prefer renting to homeownership. Just over half (52%) planned to continue renting, 28% were unlikely to renew their lease and a third were uncertain. Another 33 percent of current homeowners are considering renting their next home.
Among those employed full- or part-time or who were business owners, 54% worked fully in office or onsite, 33% worked a hybrid schedule, and 13% were fully remote. Some 28% of hybrid workers are aged 35-44, while 23% of fully remote workers fall into the over-55 age group.
“Texas/Southwest boasts the highest percentage of renters working fully in-office (63%) while the Mid-Atlantic boasted the highest percentage of fully remote workers (18%),” the report found.
What renters wanted in an apartment complex also varied. Of the survey respondents, 77% identified as “utilitarian.” For them, safety and security as well as rent and other fees, were paramount. But for the 23% who considered themselves “tastemakers,” pet-friendliness and property amenities were key.
Disposable income was also a factor. Among tenants considering a move in the next six months, 55% had an income of more than $250,000. Younger Americans were more likely to consider long-distance moves, and two-thirds were open to moving to build-to-rent townhomes or single-family houses.
“Developers and asset owners who deliver product more aligned to the new renter mindset are poised to achieve greater performance, resilience and value,” Broder emphasized.
Source: GlobeSt.
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