Apartment Tenants Are Transitioning to Short-Term Leases

Apartment tenants with pending renewals are beginning to opting for short-term or month-to-month leases rather than long-term leases, according to the latest survey from the National Apartment Association, which found that nearly 35% of landlords said that some portion of tenants renewing leases signing short-term lease structures. The previous monthly report—this latest survey was conducted from July 20 through July 24—did not address short-term lease structure, however, the data notes that tenants’ preference for short-term leases has been increasing since March.

Tenant preferences are clearly changing, and the trend toward short-term lease terms could only be the beginning. Apartment owners are beginning to lose confidence in the market, the survey also found, a development that is appears to be accelerating. In the most recent survey, 23% of multifamily owners and operators anticipate that it will take one-to-two years for operating metrics to recover and return to pre-pandemic levels. In April, only 17% of survey respondents made the same claim. Most owners continue to believe that the market will recover in the next 12 months, but the numbers appear to be shifting to a longer recovery timeline.