The 2021 rental season has started twice as strong as usual, with Gen Z and high-income Millennials being the most active apartment hunters. In particular, New York and San Francisco saw incredible interest in apartments during the first half of 2021.
Rental activity has returned to pre-pandemic levels – up 13% in the first half of 2021 compared to the same period last year – and two groups of people are primarily responsible for this. Specifically, our analysis of nationwide rental inquiries by age group showed that the main players who propelled this renewed business were Zoomers, who accounted for the largest increase in apartment inquiries – 39% per compared to the previous year – most of which went into rental. walked for the first time. When looking at renters by income, those earning over $ 100,000 were the most active this year, with 34% more than last year.
Meanwhile, interest in apartments in major cities is booming and rental applications have increased in the 30 largest cities nationwide. New York City had the most dramatic comeback, leading the trend, with rental activity doubling from a year ago, while San Francisco recorded the second highest increase in tenants moving in.
So, to get a complete picture of what renting looks like in the aftermath of the pandemic, we extracted detailed market and demographic information by analyzing 2.5 million rental requests nationwide from RentGrow.
The rental season is off to a flying start
Tenants are on the move again and this year they’ve taken the apartment market by storm. In fact, the peak rental season has started twice as strong as usual, with 45% more renters requesting apartments in March than in February. For comparison, over the same period in 2018 and 2019, requests only increased by an average of 23%.
In contrast, last year’s rental season was atypical, starting in May, post-containment, and ending earlier than usual. Then, as vaccination rates increased, the labor market began to recover and household savings increased, a feeling of newfound confidence motivated tenants to move. In surveys we conducted earlier in the year, the possibility of getting a better deal was the number one reason to move, and most renters preferred to stay in the same city. Another big reason for the increased activity was an urgent need for larger apartments to accommodate those who work from home, according to another recent tenant survey.
Overall rental activity has returned to pre-pandemic levels. For example, there was a 12% reduction in overall business in 2020, as the hype in the first half of 2021 resulted in a 13% increase in rental inquiries.
Most active rental generation of Generation Z
To understand who is behind this renewed activity, we have divided the rental applicants by age groups. In doing so, we found that the highest peak activity this year came from Gen Z. of 2021 was up 39% from the same period last year, while the number of requests from all other age groups increased by 10% or less.
In addition, the youngest generation of renters now represents 27% of the country’s apartment hunters and is also the only age group of renters whose share is increasing (slide 2). Millennials are the largest segment of active renters (45%), but their share has fallen by 8% since last year. In fact, all generations of renters have lost shares to Gen Z, the oldest of which is 24 this year.
High-income tenants looking for new apartments
Meanwhile, when we looked at the profile of rental applicants by income, employees in the two highest income brackets were found to be the most eager to change apartments, taking advantage of offers on luxury apartments. 33% more tenants earning between $ 75,000 and $ 100,000, as well as 34% more tenants earning over $ 100,000 moved in the first part of this year compared to the previous year . In this case, the need for larger and better living spaces to allow working from home and a more comfortable lifestyle were the main reasons why tenants started looking for new accommodation. Notably, the highly competitive real estate market can also be a factor for some high incomes that delay buying in favor of leasing.
Interestingly, Millennials make up about half of apartment hunters with annual incomes over $ 100,000. They are followed by Generation X, which makes up about 30% of this income group. Of course, a more generous budget allows tenants to move into a larger apartment or a nicer neighborhood, a preferable alternative to a daunting real estate market, at least for now.
Apartments fill up again in the country’s biggest cities
Although last year’s reports complained of people “fleeing” the nation’s largest cities, this year’s rental statistics put those concerns to rest. Rental activity in the 30 largest cities in the United States was higher than in the same period last year and was especially hot in the most popular rental centers on the coasts. Apartments in New York led that astonishing rebound, as the number of tenants moving into the Big Apple doubled in the first half of 2021 compared to 2020. Nationwide, the Bay Area was in a similar situation, with 79% more people applying for rentals in San Francisco. In the same way, Seattle apartments and San Jose has also seen a lot of interest from apartment hunters.
Rental activity includes all inquiries from people who have moved to the city (urban attrition), as well as people who have moved to the city from another city. What’s more, what’s even more encouraging is that in the majority of these centers, the number of tenants on the move has even increased above pre-pandemic levels, revealing the strong appeal of living in the cities. large cities preserved.
Movement of tenants in the Top 30 largest cities in the first half of 2021 compared to the first half of 2020
|City, state||Moving to town||Getting around the city||Leave the city|
|New York, New York State||209%||60%||43%|
|San Francisco, California||105%||61%||17%|
|San jose, california||43%||64%||57%|
|San diego, california||59%||13%||20%|
|Oklahoma City, OK||36%||25%||25%|
|Los Angeles, CA||47%||12%||27%|
|Las Vegas, Nevada||55%||8%||30%|
|El Paso, Texas||47%||12%||50%|
|San Antonio, Texas||28%||16%||28%|
|Charlotte, North Carolina||20%||-2%||13%|
|Fort Worth, Texas||13%||-8%||28%|
The percentages show the evolution of rental inquiries from people moving in and out in some cities in H1 2021 compared to H1 2020. Source: RentGrow.
- Rental inquiry data is sourced from RentGrow, Inc. and has been received in a completely anonymous and aggregated manner. No personally identifiable information or other confidential tenant information has been disclosed or used in conjunction with this article.
- The 30 largest US cities are ranked by population, according to the US Census Bureau’s 2019 ACS one-year estimate.
- The analysis is based on data from approximately 2.5 million rental inquiries from RentGrow, Inc. for approximately 34,000 apartment communities. Only properties for which data were available for all years relevant to the analysis were included.
- Generation Z is defined as the generation born between 1997 and 2012; Millennials are defined as the generation born between 1981 and 1996; Generation X includes people born between 1965 and 1980; and baby boomers are those born between 1946 and 1964.