Home sales in the US have stabilized since the summer months hit. The same can’t be said for the rental sector. And there’s a curious trend of renters looking outside of the usual rent-heavy markets-- urban areas-- and instead, heading towards the suburbs in their searches.
Zillow data has shown that in urban areas, rent price growth has slowed and annual rent price growth has slowed 2% in those same areas, while in suburban areas, rent price growth has slowed 1.4%.
The reason has a number of factors, and all of them are connected to the pandemic. Between unemployment hitting those who rent (i.e. lower-income homes) the hardest, rampant pay cuts, the desire to live in less densely populated areas, and remote work popularity cutting out the need to live in commuting distance from work, the shift in where renters search for homes, apartments, and condos is obvious.
Zillow economist Joshua Clark, explained:
"It's important to separate how much of the trend we are seeing comes from shifting tastes as opposed to the economic reality that renters face.
"It may be tempting to conclude that urban renters who have been cooped up without outdoor space and unable to visit their favorite local bar are ready to commit to suburban life, and that is likely true for many. But that narrative ignores the job loss that has hit renters, who are disproportionately employed in the industries most affected, and has likely played a bigger role in recent moves."
Zillow has touched on the rent crisis before. As more data comes in, companies can get a better idea of what the current market climate is like and make changes to their models accordingly.
Those renting from within urban areas need specific data in order to keep up in what is direr for them than those renting out of suburban and rural areas.
Luckily, companies have been banding together to do just that as we all navigate this unpredictable time.