2024 Consumer Housing Report
The escalation of mortgage rates often takes the spotlight in news and media; however, rental prices have also surged, affecting a vast number of individuals across the United States. According to Zillow, in the Fall of 2023, the average rent exceeded 30% of the median household income. This meant that, according to the U.S. Department of Housing & Urban Development, the typical American renting a home was facing a heavy financial burden due to rent. As we approach 2024, Zillow conducted a comprehensive survey of more than 21,000 renters to delve deeper into this market. Our annual Consumer Housing Trends Report provides insights for landlords, property managers, and marketing professionals, shedding light on the key discoveries in renter budgets, expenses, affordability, housing preferences, neighborhood choices, and decision-making trends for the year.
Here are a few notable points from this year’s report:
- Renters prioritize budget considerations over other rental aspects.
- When individuals plan to relocate, affordability remains a primary worry for most. For instance, 83% of respondents emphasized the high importance of securing a home within their initial budget. Budgetary concerns outweigh other factors such as preferred floor plans or the number of bedrooms and bathrooms. Since we initially posed this question in 2018, the emphasis on budget hasn't decreased below 80%. This apprehension is likely to persist as a primary concern for numerous renters throughout 2024.
The majority of renters express a belief that housing costs are excessively high. As of late 2023, the average rent in the United States had surged by 29% in the preceding three years. To provide context, in the three years up to September 2019, cumulative rent growth stood at a mere 13%.
Our research indicates that approximately four out of five renters (82%) find housing prices to be unreasonably expensive when compared to their perceived fair value. This percentage is notably higher in comparison to around three out of five homeowners (59%) who share the same sentiment. Merely one in six renters (17%) believe that housing prices are appropriately set.
Renter turnover, or the lack thereof, is significantly influenced by budget considerations. Those renters who haven't moved in the past year—referred to as tenured renters—highlighted that securing a good deal on rental costs plays a crucial role in their decision to stay (72%). Following closely behind are individuals who expressed financial constraints, stating that they cannot afford to relocate elsewhere (66%).
The potential for lower mortgage rates could prompt numerous renters to consider transitioning from renting to becoming homeowners. Despite mortgage rates edging towards 8%, many renters might find homeownership financially unattainable. Nevertheless, the idea of shifting from renting to owning a property remains a consideration for them.
Nearly half of the renters surveyed (45%) indicated that they would be "very or extremely likely" to purchase a home if mortgage rates decreased. This percentage is significantly higher compared to only one in five renters (20%) who expressed similar interest in buying a home in the event of rising mortgage rates.