Renters of color typically submit more applications — and pay more in application fees — before they secure a place to live than white renters do. Renters of color also typically pay a higher security deposit when they move in
Renters of color typically submit more applications — and pay more in application fees — before they secure a place to live than white renters do. Renters of color also typically pay a higher security deposit when they move in, according to results from Zillow’s Consumer Housing Trends Report. Those additional upfront costs can be a financial burden for renters, especially as rent prices have risen by a record amount over the past year.
The U.S. rental market is as competitive as it’s been in decades, with the national vacancy rate lower than at any time since 1984, according to the U.S. Census Bureau’s most recent Current Population Survey/Housing Vacancy Survey. Rents grew more last year than any year on record, and are up 17% year over year as of February, prompting some priced-out renters to look for a more affordable home when their lease expires.
About 2 in 5 renters who moved in the past year say a rent hike influenced their decision to move, and renters of color are especially likely to have experienced rising rents. Among renters who moved from a previous rental, 38% of white renters report experiencing a rent increase at their previous rental, compared to 63% of Latinx renters, 56% of Black renters, and 41% of Asian American and Pacific Islander renters.
Renters typically do not have much of a financial cushion, and the cost of finding a new place to live can be a burden. A typical renter holds $3,400 total across savings, checking, retirement and investment accounts. More than one-third (38%) of renters surveyed say they couldn’t cover an unexpected expense of $1,000.
About 9 in 10 renters paid a security deposit last year, with the typical deposit coming in at $700, a significant amount of a typical renter’s wealth. Renters of color paid a security deposit more often (93%) than white renters (85%), and among those who paid a deposit, the median amount for renters of color was higher, too — $750, compared to $600.
In addition to paying higher and more frequent security deposits, renters of color report submitting more applications and paying higher fees for those applications than white renters. In 2021, 61% of all renters applied for two or more properties — an 11-point increase from 2019 and five points higher than in 2020, likely owing to the tight rental market. The typical white or Asian American and Pacific Islander renter submits two applications, while a Black or Latinx renter typically submits three. More than one-third of renters of color submit five or more applications during their home search: that’s true of 38% of Black and Latinx renters, 33% of Asian American and Pacific Islander renters, and only 21% of white renters.
With a median rental application fee of $50, the cost can add up quickly if renters need to apply for several properties. The burden is often greater for renters of color, who report paying a higher median application fee than white renters, on top of usually needing to apply to more rentals. Among renters who paid an application fee for the home they rent, the typical white renter reports paying $50, while a typical Black renter paid $65, a typical Latinx renter paid $80, and a typical Asian American and Pacific Islander renter paid $100.
The higher fees and number of applications for renters of color are likely partially attributable to their age, income and geography. The typical renter of color is two years younger than the median white renter, meaning two fewer years of potential income growth. White renters are also more likely to live in rural markets and the Midwest, both of which are generally less expensive. Asian American and Pacific Islander and Latinx renters, in particular, are more likely to rent in the West, which includes many of the country’s most expensive and competitive rental markets.
Expanding access to credit could help improve outcomes for Black and Latinx renters. Nearly half of white renters (46%) say they were completely certain they would qualify for a rental, compared to 38% of Latinx renters and 34% of Black renters. Credit checks are part of many rental applications, and Black and Latinx adults are more prone to being credit invisible and more often live in counties with higher levels of credit insecurity.
| Share of Renters Who Paid a Security Deposit | Median Security Deposit* | Share of Renters Who Submitted an Application | Median Number of Applications Submitted | Median Application Fee** | |
| All renters | 88% | $700 | 86% | 2 | $50 |
| White renters | 85% | $600 | 84% | 2 | $50 |
| Black renters | 93% | $700 | 90% | 3 | $65 |
| Latinx renters | 91% | $650 | 87% | 3 | $80 |
| Asian American and Pacific Islander renters | 92% | $1,000 | 90% | 2 | $100 |
*Of renters who paid a security deposit
**Of renters who paid an application fee
Methodology
Survey results are from the 2021 Zillow Consumer Housing Trends Report. Zillow Group Population Science conducted a nationally representative survey of more than 2,000 renters. The study was fielded between March and August 2021. For the purpose of this study, “renters” refers to household decision-makers who moved in the past year to a primary residence that they rent.
