Renting in place is the new aging in place.
“Renters are staying put longer,” according to Redfin, which found 16.6% of renters stayed in their homes for 10 years or more in 2022. Similarly, 16.4% lived in their home for five to nine years. A decade earlier, it was roughly 14% for both sets of renters.
And 41.8% renters stayed in their home for one to four years, which is also an increase from a decade ago. A quarter of renters stayed in their homes for a year or less in 2022, but fewer did so compared to 2012 levels. (The analysis published Friday uses renter tenure data from the U.S. Census Bureau, from 2012 to 2022.)
“The uptick in tenure is beneficial for renters and their landlords,” Redfin senior economist Sheharyar Bokhari said in the report. “While the fact that people are staying longer in their rentals may mean they can’t afford to buy a home in today’s market, staying put also means they’re saving some money that could eventually go toward a down payment if they do have a goal of homeownership.”
He also suggested that staying in the same place could mean smaller rent increases, as well as less money spent on moving costs, application costs, and more.
But despite whatever positives there may be to staying in place longer, the increasingly unaffordable cost of homeownership in today’s housing world is at play here. The median U.S. Home-sale price has more than doubled since 2012 and is up more than 40% since 2019, while mortgage rates are at the highest in nearly two decades, per Redfin. Plus, let’s not forget renting isn’t cheap, so sometimes it can be difficult to save when a substantial portion of your income goes to rent.
Earlier this week, Redfin’s Chen Zhao, another senior economist, said there doesn’t seem to be much relief on the horizon; as long as there’s fewer homes than needed, prices will continue to rise, she said. Friday’s report echoed her prediction, saying because there are far fewer homes for sale than there were a decade ago, “even the renters who can afford to become homeowners—and want to—may not be able to find a home to buy.”
Asking rents have jumped more than 20% since 2019, before the start of the pandemic and its coinciding housing boom. That’s kept people from moving from one rental to another, Redfin said. Less tangibly, the pandemic changed the way people live and work, and remote work in some ways has “encouraged some Americans to be renters rather than homeowners so they could easily relocate for jobs or lifestyle without being tied down to a home they own.”
There are metropolitan areas where renters stay in place longer than others, such as New York and Los Angeles, whereas they tend to move more often in cities such as Austin. Redfin doesn’t explicitly blame cost, but it is cheaper to rent in Austin than in New York.
There’s also variation among generations on how long they stay. More than half of Gen Z renters stayed in their place for 12 months or less; 40.6% stayed between one to four years; and under 4% stayed in the same place for more than five years. To compare, 28.8% of millennials lived in their home for a year or less; close to 50.7% lived in their home for one to four years; and approximately 20% did so for more than five years.
Meanwhile, roughly a third of baby boomers who rent lived in their home for more than 10 years; another third did so for one to four years; 21.5% did so for five to nine years; and only 13.3% lived in their home for a year or less.
Of course, some Gen Zers are in college and moving around a lot or are more flexible because they might not have children yet, Redfin pointed out. Nevertheless, renter tenure may begin to change following last year’s apartment boom, which may give renters an opportunity to move as rents soften (and generally, they already have), according to Bokhari.