2024 Rent Trends – Forbes Advisor

Being a renter is not as affordable as it once was.

Higher home prices and mortgage rates are pushing what would be first-time homebuyers to remain in the rental market. A heightened demand for rentals means monthly rent prices are high, and Americans feel the pressure on their budgets.

According to Census data, 51.9% of renters are estimated to be spending 30% or more of their household income on rent.

And an April rental report by Zillow.com estimates that today’s renter needs to make $80,000 to comfortably afford the typical U.S. rental. Five years ago, that number was $60,000.

Forbes Advisor recently conducted a survey of 2,000 American renters and found that two-thirds  (68%) reported an annual income of less than $50,000. As a result, many renters are making compromises to find an affordable rental that won’t leave them cash poor each month.

Based on our survey results, the top three compromises for renters are:

• Smaller space (23%)
• Fewer amenities (22%)
• Increased budget (20%)

How Much Does It Cost To Rent?

52% of renters say their total monthly rental costs are more than $1,000

Based on our survey results, a majority of renters (52%) pay more than $1,000 a month in rent, while 48% pay less than $1,000 in rent each month.

Those living in the Western part of the U.S. are more likely to hand over more than $1,000 in rent each month (69%). More than half of Gen Zers (59%) reported spending more than $1,000 in rent, the highest proportion among the generations.

If you pay less than $1,000 a month in rent, you most likely live in the Midwest (64%) and are Gen X (55%).

The majority of renters surveyed report an annual household income of less than $50,000 (68%)

While most of the renters we surveyed make under $50,000 a year, 18% of renters have an annual household income of between $50,000 and $75,000. Just 7% of renters surveyed earn over $100,000.

Seventy-two percent of renters who live in the Midwest reported an annual household income of less than $50,000, and 77% of Baby Boomers reported this income.

Those renters reporting an annual household income of more than $50,000 are most likely living in the West (38%) and part of Gen Z (39%).

Why Do Americans Rent?

49% of renters say they rent because they can’t afford to buy

While affordability was cited as the top reason for renting, the renters we surveyed noted other reasons for why they continue to rent instead of purchasing a home.

Here are the top five reasons renters choose to rent:

1. Can’t afford to buy a home (49%)
2. Cheaper than owning (32%)
3. Lower maintenance costs (24%)
4. The flexibility of renting (i.e. being able to move/downsize, 17%)
5. Tied: Can afford to buy a home but the selection is limited (11%) and living in current city/town only temporarily (11%)

Do Renters Plan to Buy?

Over a third (34%) of renters never plan to buy a home

While more than a third of renters don’t plan on ever buying a home, 11% of renters surveyed say they plan to buy a house in the next 12 months, and 27% say they plan to buy in the next one to three years.

Of the renters we surveyed, 54% of both those identifying as Generation-X and Baby Boomers rent due to the unaffordable cost of buying.

Renters living in the Northeast region of the U.S. were the most likely to have no plan to buy a home (40%).

Gen Z renters (16%) are the most likely to plan on buying in the next 12 months, while Millennials (34%) are the most likely to plan on buying within the next one to three years.

Home prices, lack of a down payment and interest rates are the top three factors preventing renters who intend to buy a home from buying sooner

Moving from a rental to a home of their own isn’t possible for many renters due to financial constraints.

The renters we surveyed cited their top three reasons for not being able to buy a house sooner as:

1. Home prices (56%)
2. Lack of a down payment (42%)
3. Interest rates (29%)

Renters in the West are most likely to blame home prices as the reason they can’t buy a house (59%), while Midwest renters (34%) point to interest rates.

Generationally, home prices were most commonly reported among Millennials and Baby Boomers (58%) as the reason why they couldn’t buy a house sooner.

The Top Challenges for Renters

Staying within initial budget (44%) and affording move-in costs (39%) are among the top challenges for renters

For many renters, finding an affordable rental unit is only half the challenge. Saving enough money to pay for the moving costs can also be difficult.

More than half of all renters we surveyed (54%) reported spending more than $1,000 on move-in costs, including:

• Initial rent deposits
• Security deposit
• Application fees
• First and/or last month’s rent

Move-in costs did not include the cost of movers or moving supplies.

The other most common challenges renters faced include finding a rental in a location they want to live (38%) and finding a rental available by their move-in date (25%).

Top Renter-Preferred Amenities

Air conditioning, guaranteed parking and in-unit washer and dryer are the top necessary amenities for renters

When it comes to finding the ideal rental, renters have a list of needs and wants. The top three amenities considered necessities by renters surveyed are:

1. Air conditioning or central air (77%)
2. At least one guaranteed parking spot (65%)
3. In-unit washer and dryer (60%)

Across the board, air conditioning or central air ranked as the top must-have for all generations and in all regions of the country.

Renters also desired some amenities that weren’t considered deal-breakers. The top three amenities they desired, but didn’t consider necessities, were:

1. Modern finishes such as granite countertops and/or stainless steel appliances (48%)
2. Walk-in closets or additional storage (44%)
3. Smart home features such as smart locks and cameras (42%),

Renters consider the following amenities as not important or necessary:

1. Community spaces such as rooftops or business centers (44%),
2. Gym (40%)
3. Pool (35%)

Surprisingly, some renters don’t mind doing the dishes themselves. Only 38% of renters said they had to have an in-unit dishwasher, while the same percentage consider it a nice-to-have.

Based on survey results, renters in the Southwest consider more amenities to be necessities than renters in other parts of the U.S. The Southwest had the highest percentage of respondents who considered eight of the 16 amenities the most important.

By generation, Gen-Z had the highest percentage of renters who considered the most number of amenities to be absolute must-haves (9), whereas Baby Boomers had the least (2).

Having too big of a list of deal breakers can make the search for the ideal place even more difficult. Nearly a quarter (23%) of the renters surveyed said finding a rental with the amenities they needed was a challenge during their most recent rental search.

Pet-Related Renter Amenity Preferences

52% of renters said a pet-friendly unit is a necessity

The number of U.S. households with pets has jumped significantly over the last 30 years, with 66% of households (86.9 million homes) owning a pet. It’s no surprise that more than half of renters surveyed said pet-friendly rental policies are a necessity.

More than half of Gen-X (55%) and Millennial (53%) respondents cite a pet-friendly rental as a necessity—more than any other generation. And Millennials are the most likely to own a pet, according to a Forbes Advisor survey.

Just a quarter of renters (25%) said that while they would prefer a pet-friendly rental, it’s not necessary.

About two-fifths (39%) of renters said not only is having a pet-friendly rental a necessity, but they also require pet-friendly facilities, such as a designated dog walking area, and/or dog washing stations.

Top Location Factors for Renters

Crime, cost of area and distance to work rank as the most important location factors for renters

Location is one of the most important factors when it comes to choosing a house, regardless of if you’re renting or buying.

For renters, the top three most important factors when it comes to location are:

1. Crime (52%)
2. Cost of area (48%)
3. Distance to work (28%)

The three least important factors for location are:

1. Bikeability (4%)
2. Highway access (8%)
3. Congestion/traffic (10%)

Rental Search Statistics

44% of renters report submitting two or more applications when securing their most recent rental

When it comes to securing a rental, consider applying for more than one place, especially if you live in a competitive rental market.

Forty-five percent of renters said they only had to submit one application when finding their most recent rental, while 9% of renters report having to submit four or more.

51% of renters said their most recent rental search took three or more weeks

A recent Forbes Advisor study found that 11 of the top 25 most competitive rental markets are located on the East Coast. This could explain why 14% of renters in the Northeast report taking more than 10 weeks to find their current rental.

Overall, 11% of renters said it took them more than 10 weeks to find a rental, while 19% of renters said it took them one week or less to find one.

Renters in the Southwest (23%) are most likely to report the shortest amount of time to find a rental.

Most Common Living Situations For Renters

43% of renters live alone

While just over two-fifths of renters we surveyed reported living alone, the majority of renters (56%) live with someone else because they can’t afford to live alone.

Twenty-nine percent say they choose to live with someone else because they enjoy the company of roommates.

Renters who don’t live alone live with:

• Their partner/spouse (32%)
• Family (15%)
• One or more roommates (5%)

Renters prefer apartments, single-family homes

When it comes to where they choose to live, an overwhelming majority of renters would prefer to live in an apartment 42% or a single-family house 41%.

A smaller percentage of renters prefer to live in a townhome (9%) or a multi-family house (5%).

Top Compromises Made by Renters

Settling for a smaller space, fewer amenities and increasing budget are the top three compromises for renters

Oftentimes finding the perfect place to live means making some compromises. The top three compromises cited by renters we surveyed were:

1. Smaller space (23%)
2. Fewer amenities (22%)
3. Increasing budget (20%)

Renters in the West (26%) and members of Gen Z (28%) were most likely to report having to raise their budget during their most recent rental search.

A small number of lucky renters (25%) reported not having to make any compromises at all to find their current rental.

Lease Statistics for Renters

63% of renters plan to renew their lease

Considering how challenging it can be to find a suitable rental that checks the most boxes, a majority of renters we surveyed plan to renew their lease on their current space.

Meanwhile, 20% of renters said they were unsure about what they plan to do, and 17% said they don’t plan to renew their lease when it’s up.

Renters cited the following as their top three reasons for not renewing their lease:

1. They’re looking to upgrade, such as larger square footage or amenities (26%)
2. They don’t like the neighborhood (22%)
3. Their costs have been increasing and the apartment is no longer affordable (22%)

Landlord Statistics

Gen Z, Millennials are the most likely to report issues with their landlord

It turns out most renters are quite happy with their landlords. Nearly three-quarters of all renters we surveyed (74%) reported no issues with their landlord; however, 23% of renters said they have experienced issues.

More renters in the Northeast (24%) and members of Gen Z (29%) were most likely to report having issues with their landlord.

Of the issues they’ve had with their landlord, renters cited the following as the top three concerns:

1. Addressing maintenance requests promptly (48%)
2. Lack of responsiveness (30%)
3. Substantial rent increase (30%)

Renters Insurance Statistics

50% of renters overestimate cost of renters insurance by more than double

Not all renters are protecting their personal belongings with renters insurance, according to our survey. Less than half (42%) of the renters we surveyed reported having renters insurance.

Of those who have renters insurance, 19% got it because it was required by their landlord, and 23% said they made the choice to get renters insurance on their own.

Even though there are good options for cheap renters insurance available, a little more than a quarter of the renters surveyed (28%) were not sure how much renters insurance costs.

Half of all renters (50%) overestimated the monthly cost of renters insurance, guessing that a policy with $15,000 of personal property coverage would cost $30 a month or higher.

In reality, according to a Forbes Advisor analysis, renters insurance costs $14 a month for $15,000 in personal property coverage, and $19 a month for $30,000 in personal property coverage.

For some renters, it may just be a matter of not knowing how to get renters insurance.

Based on our survey, Baby Boomers are most likely to have renters insurance by choice (28%), while Millennials are the most likely to have it because it’s required by their landlord (21%).

 

Methodology

This online survey of 2,000 Americans who are renting and whose name is on their lease was commissioned by Forbes Advisor and conducted by market research company Talker Research, in accordance with the Market Research Society’s code of conduct. Data was collected from Apr 1 to Apr 8, 2024. The margin of error is +/- 2.2 points with 95% confidence. This survey was overseen by the Talker Research research team, which is a member of the MRS and has corporate membership with the American Association for Public Opinion Research (AAPOR).