Fewer independent landlords are planning to raise rents this year, but tenants paying persistently higher rents say it's likely to impact their home purchasing plans this year
"The once-hot rental market has been stabilizing and softening year-over-year since
Fewer landlords raising rents this year
According to the survey, while six in 10 landlords (60%) plan to raise rent in the next 12 months, that percentage declined in recent quarters, down from 65% in Q1 2023. The majority of surveyed landlords (69%) noted they raise rent differently for renewals versus new leases, with the most opting for 0-5% increases for renewals and 0-10% increases for new leases. Among landlords who don't raise rents differently for renewal versus new tenants, the majority (50%) plan to increase rent between 0-5%.
Planned rent increases are inline with higher costs across the board for many Americans, including landlords who are passing those costs on to their tenants. The majority of landlords (60%) stated that their ownership costs increased upwards of 10% in the past 12 months. Among landlords not planning to raise rents this year, 72% cite their unit already being priced at or above local market value.
Persistently high prices squeeze renters
The average responding renter pays between
For some, staying put when a lease is up and negotiating rent increases may help save money; the percentage of renters attempting to negotiate rent increases when renewing their lease increased from 28% in Q1 2023 to 34% in Q4 2023. This may be especially true in 2024 as higher rental vacancy rates may mean landlords are more interested in securing renewals.
Budget constraints put home buying plans on pause
Rising interest rates and inflation are impacting home purchasing plans for many renters looking at buying in the year ahead, with 82% of surveyed renters noting the economy has had an impact on their housing plans. Among renters who are not considering a home purchase this year (71%), the majority cited not having enough for a down payment (61%) and that interest rates are too high (42%).
The proportion of renters considering purchasing a home in the next 12 months decreased slightly from 30% in Q1 2023 to 29% in Q4 2023, with concerns about a lack of savings and their ability to qualify for a mortgage increasing. That's not surprising, given that two thirds of renters (68%) reported saving less each month than they were 12 months ago.
Rental owners staying put on their properties
Higher home prices and mortgage rates are also impacting landlords' plans for investing in more rental properties in the year ahead. Only 22% of surveyed landlords reported plans to buy one or more rental properties in the next 12 months, not unexpected given that approximately 7 in 10 surveyed landlords already have a mortgage on at least one rental property, and would likely finance another purchase with a mortgage. The majority of landlords have no plans to exit the market either: 73% stated they don't plan to sell any units in their portfolio over the next 12 months.
Methodology
Avail's quarterly survey of landlords and renters was conducted online in the
About Realtor.com ®
Realtor.com ® is an open real estate marketplace built for everyone. Realtor.com ® pioneered the world of digital real estate more than 25 years ago. Today, through its website and mobile apps, Realtor.com ® is a trusted guide for consumers, empowering more people to find their way home by breaking down barriers, helping them make the right connections, and creating confidence through expert insights and guidance. For professionals, Realtor.com ® is a trusted partner for business growth, offering consumer connections and branding solutions that help them succeed in today's on-demand world. Realtor.com ® is operated by News Corp (NASDAQ:NWSA) [Nasdaq: NWS, NWSA] [ASX: NWS, NWSLV] subsidiary Move, Inc. For more information, visit Realtor.com ®.
Media Contact
View original content:https://www.prnewswire.com/news-releases/realtorcom-avail-survey-finds-despite-cooling-rental-prices-homeownership-remains-out-of-reach-for-many-302057026.html
SOURCE Realtor.com