Ongoing housing issues in the United States — which many have claimed is a “crisis” — have now changed how many Americans rent.
New data has shown that American renters are choosing to stay in their rented apartments or homes for much longer than was normal before. This comes as many potential home buyers have felt priced out of the housing market.
Renters Are Sticking Around for Longer
According to new data from real estate brokerage Redfin, Americans are choosing to stay in their rented homes for a longer time frame than they were a decade ago.
On average, 16.6% of renters are staying in their homes for at least one decade. This percentage has risen from the 13.9% reported ten years ago.
Renters Aren’t Moving From Place To Place
Renters sticking around for much longer than seen before isn’t the only way the ongoing housing crisis has impacted how Americans rent.
This new report has also shown that renters aren’t moving from one place to another once their lease is up. Instead, they’re choosing to stay and renew their lease.
Why Renters Aren’t Moving
There’s likely a variety of different reasons why renters aren’t choosing to move to other properties when their lease is up. These factors also could change from region to region.
However, experts have claimed that many renters may choose to renew, rather than leave, because those who renew often see smaller monthly rent increases than if they sign a whole new lease agreement with a new property.
Rent Has Skyrocketed
This new data comes as rent in the United States has continued to skyrocket, just as housing prices have.
Rent has risen in price by more than 20% since 2019 alone. This has resulted in renters finding it difficult to move elsewhere, especially as their new property may be much pricier in monthly payments than what they’re used to.
Are Americans Experiencing a Lack of Housing Opportunity?
As a result of these rent increases, data has shown that less than 21% of renters decided to move to another rental in 2022. This is compared to the 27% who did in 2013.
Thanks to this recent reporting, some analysts have claimed that Americans are now experiencing a lack of housing opportunities in both renting and owning capacities.
Staying Could Help Potential Home Buyers
However, other analysts believe that staying put in one rented location could actually help future home buyers in the long run.
If they’re choosing to save money by staying in their rented property, then this could mean that they’ll be able to save up for a down payment on a home.
Saving Money To Buy a Home
Redfin Senior Economist Sheharyar Bokhari explained how this could eventually help Americans buy a home.
“Staying in the same home means they’re likely to face smaller rent increases, and they’re saving money on moving costs and application fees,” Bokhari stated.
Housing Prices Have Soared
For years now, housing prices throughout the United States have soared to record levels. Since 2012, the average price of a home in the U.S. has more than doubled.
Since just 2019, the price of homes has skyrocketed to more than 40%. These high prices have forced many Americans to realize that they’re unable to afford an average home on the market — and this has caused the country’s ongoing housing crisis.
Americans Feel Priced Out
High housing costs have caused many regular Americans to feel priced out of the housing market. High borrowing rates have also helped fuel this feeling.
Some generations, such as the Millennials, have felt exceedingly locked out of the housing market, which has even led many of them to believe they’ll rent for the rest of their lives.
Will Home Prices Fall?
So far, it doesn’t look like housing prices will fall astronomically overnight — but that doesn’t mean they won’t. Already, there are signs that some areas of the country have seen home prices lower.
For example, home sellers just slashed prices for the first time in over a year in an attempt to coax buyers back to the market. High prices of homes have hurt demand, which could lead to a housing price drop soon.
Another Sign of a Problem in the Real Estate Market
Thanks all of this new data, some experts have pointed to ongoing signs of real estate market problems. Realtor.com chief economist Danielle Hale explained this.
“If a household stays put in a home or neighborhood that is not a good fit because they can’t find other options that meet their needs or budgets, this can be an indication of a problem in the real estate market that likely stems from the shortage of homebuilding that has been most acute for owned-homes, but has been observed in rentals as well,” she said.
