More Renters Are Staying Put Longer

One in six renters are now staying in their rental unit for 10 years or more.

Jordan B. & Han-Gwon Lung
June 04, 2024

Together with

Good morning. U.S. renters are less likely to move than they were a decade ago, as soaring housing costs have priced many out of homeownership. Plus, BTR housing starts have more than doubled over the past decade as a proportion of all single-family construction.

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Market Snapshot

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*Data as of 5/31/2024 market close.

RENTAL TRENDS

More Renters Are Staying Put Longer

One in six renters are now staying in their rental unit for 10 years or more.

Trending: A recent Redfin study shows that renters are staying in their homes longer, with 16.6% staying for ten years or more in 2022, up from 13.9% a decade earlier. Similarly, 16.4% lived in their homes for five to nine years, an increase from 14% a decade ago. The majority of renters (41.8%) stayed for one to four years, slightly up from 39.9% a decade earlier.

Decline in STRs: The only category showing a decrease was renters staying for 12 months or less, with only 25.2% in 2022 compared to 32.2% in 2012. This suggests a shift towards more stable rental arrangements.

Cost savings: Staying longer in the same unit allows renters to save on costs like moving expenses and application fees, according to Redfin Senior Economist Sheharyar Bokhari. Landlords also benefit from long-term tenants, saving on cleaning and marketing vacant units.

Rising rental prices: Rental prices have soared over 20% since 2019, discouraging renters from moving frequently. Additionally, the median U.S. home-sale price has more than doubled since 2012, making homeownership less attainable and keeping renters in place longer.

Geographic trends: The study also highlighted geographic variations. Renters in Austin, TX, moved most frequently, with 38.2% staying for 12 months or less in 2022. Conversely, renters in New York, Riverside, CA, and Los Angeles stayed the longest, largely due to high costs of buying homes or signing new leases in these expensive metros.

➥ THE TAKEAWAY

Why it matters: The trend of longer rental tenures is driven by cost savings, rising rental and home prices, and lifestyle choices, particularly in high-cost areas. This shift reflects a broader change in how people approach housing stability and financial planning.

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✍️ Editor’s Picks

Airbnb fights back: Short-term rental hosts around the country are banding together to lobby against legislation that could stifle their business, and big companies are supporting them.
Miami hustle: Miami’s job market is booming with a low 2.7% unemployment rate, but rapid inflation has doubled housing costs in 6 years.
Inflation concerns rise: The US economy is slowing down even as everyone waits for potential rate cuts later this year. The PCE price index is up 2.7% as consumer spending and incomes dip.
Canadian expansion: Colliers (CIGI) is set to acquire Canadian firm Englobe Corp., with 2.8K employees, for $475M. It will be rebranded as Colliers in 2025.
Carbon crunch: Global banks are busy adjusting their CRE loan portfolios due to emissions risks, aiming at significant emission cuts by 2030.
Topsy-turvy: In April, CRE loan delinquency growth was slowing down even as, nationally, CRE lending has actually gone back up again.

🏘️ MULTIFAMILY

Common collapse: Former co-living leader Common has filed for Chapter 7 bankruptcy, owing up to $50M with just $10M in assets.
Affordable alliance: Seattle’s Low Income Housing Institute partners with Amazon (AMZN) to purchase an apartment complex in the city’s pricey Bellevue district.
Creative financing: AMCAL Housing secured a $101M loan for a 335-unit Woodland Hills complex, with KKR’s fund offering ‘attractive financing’ with competitive terms.

🏭 Industrial

Salty reality: Vacancy rates in Salt Lake City have risen sharply, leading to a 65% decline in the city’s construction pipeline from its peak.
Drone deliveries soar: Amazon’s (AMZN) drone deliveries are advancing apace with FAA approval for beyond visual line of sight operations in logistics.

🏬 RETAIL

Outlet odyssey: Tanger brings Sephora (LVMUY) to five U.S. outlet locations, encouraging longer visits with Sephora’s first off-price venture.
Retail reign: Lamar Companies and Real Capital Solutions acquired Geneva Commons, a suburban Chicago center with 437KSF and high-income residents.
Wynwood wager: Morabito Properties paid $14.6M for a South Florida Wynwood site and secured a $35M loan for the project even as office market doubts persist.

🏢 OFFICE

Permanent makeover: In a sign of the times, a 100-year-old boutique office building in Tribeca, Manhattan will be converted into self-storage space.
Innovative expansion: Persimmon Technologies, a subsidiary of Sumitomo Heavy Industries (SOHVY), leased a 142.2KSF office space in Bedford, MA, from W. P. Carey (WPC).

📈 CHART OF THE DAY

The Build-to-rent (BTR) sector is growing very quickly, according to CoStar data. In fact, BTR homes accounted for nearly 8% of all single-family housing construction starts (in terms of a 12-month rolling average) by the end of Q1, up 100% from just 4% in mid-2021.