Renters are increasingly choosing to stay put for more than a decade, as soaring home prices and tight inventory keep many on the sidelines of homeownership. Among those long-term renters, many are seeking the spaciousness offered by three-bedroom homes as they look for space to settle into for a while, according to a Point2Homes research report.
“This trend works like a seesaw: If the number of renters who move after less than a year is dropping, then long-term renters are on the rise,” said the report. “That's because renters who don't keep moving and don’t become homeowners inevitably become long-term renters.”
Millennials are part of the reason for this trend, as nearly half of this contingent has yet to buy a home, said the report. Meanwhile, the increasing price to rent is also discouraging renters from moving, while the increasing availability of build-to-rent single-family homes allows renters to expand their family or attain larger space without buying a bigger home.
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There are about 45.7 million renter households in the United States, about 14.2 million of which are single-family renter households. The share of renters who have opted to spend between five and nine years and more than 10 years in their rental before moving increased 2 and 2.7 percentage points respectively, said Point2Homes. Meanwhile, the number of renters who move after just one year fell 4.5 percentage points during the past five years, with the largest drop in short-term relocations happening in Bakersfield, California; Tucson, Arizona; and Omaha, Nebraska.
While buying a home is difficult, so is the process of finding a new rental, signing a new lease, covering moving costs and actually moving.
“For this reason, renters are increasingly preferring to stay within a comfort zone where they've become accustomed to the community, the amenities and the day-to-day routine,” the report said.
Nearly half of renters of single-family homes prefer larger, three-bedroom houses for rent, while less than 10% favored one-bedroom houses for rent, said the report. By net numbers, seven million renters live in three-bedroom houses followed by four million in two-bendroom rentals. Los Angeles has the largest number of three-bedroom home renters in the country, followed by Dallas and Philadelphia.
Aside from family formation, remote work could also be a driver in the demand for larger homes, said the report. Many workers fled from populous cities to suburbs, smaller cities, towns and even rural areas during the pandemic.
“No matter where they live, renters need larger homes to be able to work — and are becoming increasingly willing to rent them if buying is out of reach,” said the report.
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Kristen Smithberg
Kristen Smithberg is a Colorado-based freelance writer who covers commercial real estate, insurance, benefits and retirement topics for BenefitsPRO and other industry publications.
