Out-of-state applicants for rental properties increased 42% from 2020 to 2021, according to a new TransUnion (NYSE: TRU) analysis. In that same time period, rental applications in rural areas increased 28%, while urban rental application volume rose just 10%. The primary driver of these trends appears to be a mix of rising housing costs and the widespread availability of remote work, which began during the COVID19 pandemic.
Overall occupancy of U.S. rentals reached a record 98% in January 2022 . This may have been driven in part by an influx of homeowners who capitalized on their home equity by selling while housing prices were at an all-time high and renting until valuations come back down.
“Remote work has become the norm,” explains Maitri Johnson, VP of Tenant & Employment Screening at TransUnion. “Renters are actively seeking new locations that better suit their budgets and lifestyles. While many are going out-of-state to sunnier environments, we’re also seeing a preference for rural areas and exurbs that have more space and a lower cost of living, but also a relative proximity to cities and airports.”
The higher costs for home purchases simultaneously kept many younger adults from becoming first-time homebuyers. However, the same inflationary trends have impacted affordability in the rental market as well. Rent prices increased 14% between 2020 and 2021 while the median income of applicants has only increased 6% since 2020. Predictably, delinquencies on rent payments have increased. Whereas on-time rent payments were at 96% in January 2020, they had dropped to 92% at the end of 2021.
Maitri Johnson discusses:
- Changes in the rental market
- Factors driving the increase in rental demand and pricing
- Impact of higher rents on young adults
- Results from the Quick Guide, “How COVID-19 and Remote Work is Reshaping U.S. Rental Demand.”
ABOUT Maitri Johnson
Maitri Johnson is the Vice President of Tenant & Employment Screening at TransUnion. Prior to her current role, Maitri Johnson spent more than 20 years as a multi-family operator, including 13 years with Riverstone Residential Group as Executive Vice President of Property Services. She also spent a brief time in the emerging space of single-family rental homes, where she oversaw property management at Waypoint Homes, now Invitation Homes. After serving on the Executive Committee of the National Apartment Association’s (NAA) Board of Directors, Johnson was appointed President of the NAA Education Institute. She also chaired the NAA Lease Advisory Committee, which oversees lease document activities for the multi-family industry.
This interview is provided by TransUnion
For more information about the research, read the Quick Guide, “How COVID-19 and Remote Work is Reshaping U.S. Rental Demand.”
About TransUnion (NYSE:TRU)
TransUnion is a global information and insights company that makes trust possible in the modern economy. We do this by providing an actionable picture of each person so they can be reliably represented in the marketplace. As a result, businesses and consumers can transact with confidence and achieve great things. We call this Information for Good.® A leading presence in more than 30 countries across five continents, TransUnion provides solutions that help create economic opportunity, great experiences and personal empowerment for hundreds of millions of people.
