Why Are People Renting Instead of Buying? (April 2022 Insights)
This is a critical question to consider as more renters leads to an increased demand for apartments which drives higher rental prices for value-add multifamily investments.
A recent survey from Redfin found that affordability is the number-one factor keeping renters from becoming homeowners. Some of the key findings were:
1 in 3 U.S. renters can’t afford to buy a home where they want to live and 30% are unable to save for a down payment
Debt is the most common financial obstacle to home buying, with 45% of renters saying it has kept them from trying to buy a home. Just 12% said financial obstacles are NOT getting in the way of homeownership.
1 in 5 renters are moving to be in an area with more affordable rentals.
Unfortunately for prospective buyers, homes are 34% more expensive than they were before the pandemic started, and would-be buyers have half as many homes to choose from.
Rental prices have also climbed sharply over the past few years which has resulted in a migration from high-priced coastal cities to the sunbelt states that offer better affordability and value from a rental perspective. The Q1 2022 population inflow analysis from Redfin does a great job of highlighting this trend:
These migration trends and other key metrics is why we focus on partnering with operators in 9 out of 10 markets above (excluding Sacramento).
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