MHN Editorial Director Diana Mosher interviews John Kobs, CEO & Co-Founder of apartment search engine ApartmentList.com, which recently released the results of its first quarterly Rentonomics Report. Forty percent of American households, or roughly 100 million people, are renters, and based on a new survey of approximately 1,000 apartment searchers, nearly one quarter of renters plan to rent for life.
The first Rentonomics Report consists of both a consumer survey and pricing study conducted by Apartment List. The report is designed to evaluate pricing data as well as trends in renter sentiment. Apartment List analyzed asking rents for 1.8 million rental properties around the U.S. from January 2011 through June 2012. Due to a limited sample size, pricing data was not available for MT, SD, VT, WV, and WY. The renter survey was fielded between June 25 and September 17, 2012 and was sent to a random sample of Apartment List’s user base. There were 1043 responses from renters across the U.S.
“There are potentially more than 25 million people who are looking to rent for life and that is a huge win for the multifamily industry,” said John Kobs, CEO and co-founder of Apartment List. “This fundamental shift in the mindset of the ‘American Dream’ opens up a great opportunity for owners/operators to leverage more robust ways to market their communities among this subset of renters.”
Even with the economy and housing market showing signs of modest recovery, survey results indicate renters are content to continue renting, even in light of increasing rental prices. When asked about the length of time they plan to rent, 24 percent of renters say they plan to rent for the rest of their lives. Forty-seven percent of respondents believe renting, rather than buying, is smarter in today’s economy, including 30 percent of renters who say home ownership is overrated.
Of the respondents who do plan to eventually buy a home, 41 percent say they still plan to rent for the next one to three years, while 20 percent plan to rent for four to five years and another seven percent think they will rent between six-ten more years. Only four percent plan to be renting for less than one year.
Nearly half of all renters are indifferent to or negative on the choice between renting and owning a home. Of the 24 percent who said outright they do not want to be homeowners, 39 percent cite the expense of homeownership as a deterrent, and 31 percent believe that owning is too risky financially. While 55 percent of renters surveyed say they wish they were homeowners, nearly the same amount —59 percent —say the current economy continues to delay their ability or decision to buy a home.