Nearly half of renters in the United States switched to month-to-month payments during the COVID-19 pandemic, yet another sign that the virus-induced crisis has caused a disproportionate amount of disruption on the multifamily market.
According to a new study from multifamily fintech Entrata, 47% of American renters went from long-term leases to month-to-month payments because of the pandemic. Of those renters, 42% said that the pandemic affected their rental rate, with 34% saying that their rent increased.
Perhaps spurred by the coronavirus crisis, over a third (36%) of renters say they spent more time over the past year questioning where they live and why. Nearly one in five renters (19%) now say their interest in month-to-month rent payments has increased in the last 12 months.
Entrata’s survey also found that 61% of renters indicated that onsite amenities at their rental properties have been closed or are now strictly regulated due to COVID-19. Just 14% of renters said that their rent was reduced because of such limitations, although 79% of those whose onsite amenities have been closed or regulated think that their rent should have decreased.
“We’re seeing a shift in the industry as renters look for more flexible leasing options and think differently about apartment amenities,” said Chase Harrington, Entrata’s president and chief operating officer.
Mirroring the housing market at large, one amenity that Entrata’s survey found renters expressing a preference for was simple: more space. Twenty-two percent of renters moved to a larger apartment in the past year. And while renters who moved during the last year cited the cost of rent as the top reason for relocation (given by 27% of renters who moved during that timeframe), needing more space came in a close second (24%).
“[The past year] was a life-changing year for people, industries and businesses across the globe,” Harrington said. “Our survey of U.S. renters shows that many moved to larger spaces to accommodate work from home needs, moved back to hometowns and some even moved to the city to take advantage of lower rental rates.”
Despite all the shifts in the rental market caused by the pandemic, it remains clear that homeownership remains the goal for many renters. Sixty percent of respondents to Entrata’s survey say that they hope to stop renting and own a home in the next three years, with 21% of renters — including 30% of millennials — planning to stop renting and buy a home after the pandemic subsides.
