Earlier this year Entrata partnered with PureSpectrum to survey approximately 2,000 renters of varying income levels across the United States to get a better grasp of what today’s renter values most. Key highlights include

• For 41% of respondents, home ownership isn’t part of their American Dream
• 20% of respondents are life-long renters by choice–a 33% increase from 2021
• 66% of respondents say renting better fits their lifestyle
• ⅓ of respondents say they could afford owning a home, but choose not to

With this change in desires as the background, Amanda Fumo, Chief Revenue Officer at Entrata and Chase Harrington, Entrata’s President sat down to discuss the evolution of the renter and how it impacts the strategy of multifamily businesses going forward. The following is a brief recap of their conversation.

Renting better meets needs

Apartment communities are built to better meet the needs of today’s residents than they were previously. Residents are getting a lot of bang for their buck and renters are taking notice. While market forces like inflation and higher interest rates are playing a role in this shift, they aren’t the deciding factor. Today’s renter craves both financial flexibility and flexibility of location. Before the pandemic, many individuals didn’t think it was possible to look for jobs outside of their geographic location or move to a city that better meets their needs regardless of where their employment is located.

But with the increase of working from home and hybrid working situations, that all changed. One of the determining factors of where you were going to live didn’t matter as much anymore. People saw they could get their work done from anywhere, and when they realized this it didn’t make sense to be tied down to a mortgage, which made freedom of movement more difficult. It made more sense to have short-term commitments to their living situation.

Beyond that, there were less responsibilities and unforeseen costs associated with renting vs. owning. “[Renters] started to realize, ‘I want this flexibility wherever I live and having a home comes with all the responsibility of lawn care. Is there a water burst? What's happening at my house while I'm gone?’” When they live in an apartment community those worries are gone.

A community for every person

Another selling point of renting over buying is the different types of communities and services available at properties now. There’s something that meets everyone’s individual needs, depending on interests and lifestyle. If you want all the services and amenities, there’s a community for that or if you want a lower rate and don’t really care about having all the bells and whistles, there’s something for you as well and everything in between.

Financial priorities are shifting

Individuals are placing more and more value on financial flexibility. It used to be that they were comfortable with long term investments like real estate, but now they want something more liquid in case circumstances in their lives change quickly. This is something that home ownership doesn’t afford them.

Harrington pointed to Maslow’s hierarchy of needs, which at the base is built on making sure physiological needs along with safety and security are met. In the past, safety and security meant having shelter, a home that was yours. That made people feel like they were taken care of. Now having money readily available, whether times are good or times are bad, is where people find that security.

Today’s renter is more financially savvy

A vast majority of those surveyed said they had an understanding of their credit score with 41% saying they are happy with their credit score. They have more financial stability than those who had rented in the past. They’re more sophisticated about what things cost and what they want included with their rent. Additionally, they feel they are on better financial footing than their parents were at their age, which is something that as recently as 20 years ago would not be the case.  

Learn more

To access the full results of our report, The American dream has reached a fork in the road, click here or to watch Amanda and Chase discuss the results and how the evolution of the American dream is impacting multifamily businesses, check out our latest webinar.