Borne from the pandemic, a widespread remote work movement has had an unprecedented effect on the U.S. housing market. As Covid-19 forced workers out of offices and into remote work scenarios, a seismic value transfer from commercial to residential real estate began. The brunt was felt by renters and home shoppers alike. 

After initially falling, rents started rising. Home prices rose faster. Then mortgage rates began climbing, reaching levels not seen since before the Great Housing Recession. These trends likely pushed more home shoppers back into the rental market, further spiking demand. Rents rose even more, but now they’re showing signs of ebbing.

“Rent levels have reached a high. They’ve become difficult for people to afford,” says Senior Zillow Economist Jeff Tucker. “That's shrinking the quantity of rental housing that people demand. And how that looks for a lot of people is a reversal of that household formation boom in 2021.” The result, Tucker says, is a renter demographic that’s highly budget conscious and facing economic uncertainty in the near-term.  

Zillow’s annual Consumer Housing Trends Report gives landlords, property managers and marketing managers a look at what has changed; dives into renters’ mindsets; surveys their financial stressors; and reveals key factors that affect tenant decisions about where to live.

A few highlights from this year’s report

• Rent as a percentage of income has risen steeply. The typical market rate rent across the U.S. is nearly 60% of the annual median household income among renters.
• Renters are searching with mobile more than ever, and they're frequenting a smaller number of online resources during those searches.
• Rents are cooling nationwide and beginning to fall in some metros.
• Sixty-four percent of renters say they’re considering moving within the next three years. 
• Nearly half of these renters say they’re considering moving in the next year.
• Nearly half of these renters considering moving say they plan to buy their next home. While many may not be able to move, these intentions foreshadow volatile renewal and pricing decisions.
• More renters in 2022 consider staying within budget to be an “essential” characteristic.
• Pet ownership among renters grew substantially during the pandemic, and demand for shared amenities continues to drop.

Understanding the needs and concerns of prospective renters and tenants can help keep them happy and ensure building reputations remain intact. Download the report to get tips on how to provide for your renters and prospects.