Annual Spring Renter Migration Patterns
By Michael Lucarelli March 20, 2023 2:50 pm
reprints
No, we’re not talking about the annual 3,000-mile journey of the snow geese back to their breeding grounds in the northern tundras, or the influx of migratory songbirds into the Northeast corridor. We’re talking about human migration patterns. This time of the year isn’t bustling with just bird enthusiasts looking for their next trip, but also with those considering moves across town, across state, or across the country.
Due to an economically turbulent 2022, which was also marked by lofty rent prices in many metropolitan areas, 40 percent of renters searched for apartments outside their home market, and 27 percent looked for digs in a new state altogether, according to a recent study by Apartment List.
RentSpree data shows that, while exacerbated by the pandemic, this has been a slowly emerging trend over the past few years. About 18 percent of applications on our system applied for out-of-state places in both of the past two years, compared with 14 percent in 2020 and 13 percent in 2019.
As stated in my last article, the flexibility of renting as opposed to owning a home, and the lasting popularity of remote work, has continued to greatly affect living patterns across the nation. It has also made renting — especially for many of the younger generations — a choice rather than a necessity.
Given the relatively high cost of living, California and New York have been the top two markets in terms of the number of renters leaving the area, with Florida and Texas being among the key destinations. We are laser focused on both of those states given their steady influx of new residents and demand for rental spaces.
Long-distance moves tend to be more common among higher-income renters. Those searching in a new metro or state come with higher budgets than the existing residents of the markets they’re considering. This dynamic is particularly noteworthy as housing affordability has been a key topic for many.
So, while spring is usually a busy time in the rental segment, this year might prove to be a particularly formidable challenge for many given the competition and the continuing nationwide shortage of rental housing.
We can see a softening in many prominent markets across the U.S.: On average, renters in January paid a median rent that was 3.5 percent lower than they would have paid last August. But the softening has to be viewed in context, and greatly depends on the area.
A “bargain rental market” is still unlikely anytime soon, particularly in high-demand markets such as Texas and Florida, where the local population is also competing for space with the influx of those coming in from out of state.
So, this spring is likely to bring about a huge number of rental transactions. And, not to sound too much like a Californian, but whether you are a renter or an agent helping those seeking living spaces, you are well advised to start paddling now to get ahead of that wave.
Michael Lucarelli is the CEO of RentSpree.
