2022 has been a tough year for renters and prospective home buyers alike. As people from both groups searched for more space in a pandemic-altered world, price increases and interest rate hikes pushed home-buying out of reach for many.
“As the economy reopened, and people got vaccinated and returned to work, many people also had a lot of disposable income,” Jeff Tucker, a senior Zillow economist, says. “One thing people did with that extra financial freedom was move back out, get a place of their own, move back to the cities, or move out from their parents’ or roommates’ homes. That helped cause some of that boom in prices.”
As of Q3 of 2022, rents are beginning to fall in some metros
Many of the metros seeing falling rents also previously saw some of the biggest run-ups.
The West was particularly affected.
ABOUT THIS REPORT
This year’s Consumer Housing Trends Report gauges how renters are feeling about the search process, what they want in a rental and what might best attract qualified tenants. For the first time in several years, the 2022 CHTR includes both renters who have moved in the last year (noted in this report as “recent renters”), as well as tenured renters, who have
lived in their homes longer.
Drawing on a survey of 8,300 unique renters, as well as additional Zillow research, the report unearths some unexpected findings about shifts in urban, suburban and rural populations; how much renters care about shared amenities like gyms; and the percentage of renters who are considering a move to homeownership.
Chapter 01: Renter preferences and rental practices
What renters want, and what they’re concerned about
2022 has been marked by inflation, high rents and low vacancy rates, all of which have made affordability a primary concern for renters. But some of the factors driving this year’s record rise in rents are already changing.
According to Zillow economists, home prices will drop — albeit not as sharply as they did during the Great Recession — and sellers will have to make other concessions. These trends could allow some renters to enter the for-sale market. Similarly, as some renters flee high rents, moving to downsized homes or living with roommates or family, demand for rentals will likely ease. In addition, more supply is set to enter the rental market in the form of apartment construction that’s expected to hit a 50-year high in 2022.
Further, high rents, lump-sum security deposit burdens and diminishing concessions may already be giving renters pause, which is expressing itself as a nationwide cooling of rent prices. On top of all this, remote work possibilities and large-scale pandemic pet adoptions have changed renter calculus in a way that can’t be overstated.
Affordability tops renters’ desired characteristics
Eight in 10 renters reported affordability as a very or extremely important characteristic in 2022. Shared amenities like gyms and gardens haven’t seen a rebound, despite easing Covid restrictions. Renters are now largely seeking refuge from climbing rents and other financial pressures.
Security deposits remain the norm, but disparities persist
Upfront damage deposits can be another barrier to rental affordability. Eighty-five percent of renters reported paying a security deposit, regardless of what type of property they rented. The typical deposit in 2022 ranged from $500 to $999. But race and age disparities persist.
Renters of color are more likely to report paying a deposit than white renters. Latinx and Asian American/Pacific Islanders are more likely to pay a more expensive deposit. And the oldest generations of renters are the most likely to avoid paying a deposit at all. Lastly, people who rent single-family detached houses are more likely to avoid paying a deposit, but when they do pay one, the typical payment was higher, between $1,000 to $1,499.
More renters now live with pets
As work-from-home scenarios and loneliness proliferated during the pandemic, pet adoptions ballooned. An ASPCA/ Ipsos survey in May 2021 found that one in five households had acquired a dog or cat in the previous year. What’s more, 87% of the study respondents said they’re not considering rehoming their animal.
Renters were no exception. Since 2018, the percentage of renter households that reported owning a dog has risen to more than a third, and those reporting a cat rose to almost 30%. Overall, 59% of renters in 2022 reported having at least one pet, up from 46% in 2018.
Chapter 02: Digital tools and user experience
How to improve your digital footprint and experience
The migration of the rental search process to the internet was hastened in some ways by the pandemic. In other ways, it was just inevitable. Renters expect to do more online in 2022, as actions like signing a lease and paying rent become increasingly digitized.
More renters are searching on mobile devices
Online search across all device types is on a general upward trend. Mobile sites and apps have seen a steady increase since 2019
ONLINE RESOURCES USED WHEN SEARCHING
Renters report using fewer search tools overall
Online search across all device types is on a general upward trend. Mobile sites and apps have seen a steady increase since 2019. More renters are using sites and apps in their search, but they’re using fewer sites and apps when they search. Only 51% used five or more resources in 2022, down from 62% in 2020. This may be due to consolidation in the rental listings market or growing trust in certain brands.
Nearly a quarter of recent renters took zero in-person tours
Since 2019, the percentage of recent renters who took zero in-person tours climbed four percentage points. The percentage who took five or more tours continues to decline, suggesting that more narrowing may be done online. This trend likely indicates the increased importance of robust and comprehensive listings.
Rise in electronic lease signing holds
Signing a physical lease can be a barrier for some tenants. The portion of recent renters who reported signing their lease online has jumped 13 points since 2019.
Use of online application options grows
Spurred by the pandemic and wider adoption, more renters are submitting more online applications. Since 2018, the percentage of renters who reported submitting zero online applications has dropped, and the percentage who reported submitting one or more has grown. Overall, online options may reduce friction for prospective tenants, especially as younger generations show increasing preference for digital tools. The typical application fee was between $40 and $59.
Demand for online rent payment ticks up
Renters increasingly indicate that they’d ideally pay their rent online. With a spike in 2020, that percentage has climbed steadily since 2018. In 2022, a 12-point gap exists between those who typically pay rent online and those who would like to.
Chapter 03: The typical American renter
This final chapter gives an economic and demographic portrait of the typical renter in 2022. Because some demographic change tends to play out over a long time, some of these characteristics haven’t shifted substantially over the last few years.
The median US renter in 2022 is 39 years old, less likely than the general U.S. population to identify as white, more likely to have never been married and more likely to identify as LGBTQ+. As the following close-ups will illustrate, some of these trends are especially true for renters who reported moving within the last year (recent renters).
In terms of regionality, renters are more likely to live in the South or the West than the Northeast or Midwest. Nearly half of renters called the suburbs home, while the rest were divided between urban and rural settings. And while the percentage of rental household decision-makers who hold a four-year college degree was largely in line with that of the overall population, renter households on average report significantly
lower incomes.
Age
The median renter is 39 years old in 2022. For renters who moved in the last year (recent renters), the median age is 31 years old. Renters who’ve lived in their current home for at least a year (tenured renters) are typically older: Their median age is 42 years old.
Generation
The median renter is 39 years old in 2022. For renters who moved in the last year (recent renters), the median age is 31 years old. Renters who’ve lived in their current home for at least a year (tenured renters) are typically older: Their median age is 42 years old. Millennials, who recently surpassed boomers as the largest living generation, also represent the largest percentage of renters. Having lived through the Great Recession, millennials have faced more hurdles to homeownership than their older peers. Saddled with stagnant wage growth, student loan debt and a waning year-over-year inventory, many millennials have chosen to live with parents while saving for a down payment.
Race and ethnicity
While just 12% of U.S. adults identify as non-Hispanic Black or African American, 20% of renters identify as Black. The Black homeownership rate has improved in recent years, but remains disproportionately low.
Region
While just 12% of U.S. adults identify as non-Hispanic Black or African American, 20% of renters identify as Black. The Black homeownership rate has improved in recent years, but remains disproportionately low. At 36%, the largest share of renters lives in the South. That’s followed by the West at 29%, the Northeast at 19%, and the Midwest at 17%.
Income
Renters tend to have lower median household incomes ($42,500) than the U.S. population overall ($67,500). As such, the post-pandemic rental climate and economic conditions have been a disproportionate burden for many.
Education
Renters tend to have lower median household incomes ($42,500) than the U.S. population overall ($67,500). As such, the post-pandemic rental climate and economic conditions have been a disproportionate burden for many. Renters tend to have a similar level of education to the overall population of U.S. household decision-makers. For example, 36% of renters have at least a four-year degree, similar to 34% of overall U.S. household decision-makers.
Gender identity and sexual orientation
Renters are also more likely to identify as LGBTQ+ than the U.S. population as a whole, possibly attributable to renters trending younger, among other factors.
Urban, suburban and rural renting
While home-buying demand shifted from urban areas to the suburbs and beyond during the pandemic, recent renters reported less change based on the population density of their zip codes.
Most recent movers changed neighborhoods but stayed local
The largest share of recent renters (those who moved within the last year) reported staying in the same city but changing neighborhoods (40%). About one in ten (11%) reported staying in the same neighborhood. The smallest share (3%) moved from abroad.
Home type and median renter unit size
More than half of respondents (53%) reported living in apartment buildings, and the typical renter lives in a 2-bed, 1.5-bath apartment spanning 500 to 999 square feet.
Relationship status
Renters are less likely to be married, divorced, separated or widowed than the general U.S. population.
“If you have a tenant who’s paying on time, and they move out in response to a big rent hike at renewal time, that vacancy will likely be harder to fill next year than it was last year.”
Jeff Tucker, Senior Economist at Zillow
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