The housing market has been on a wild ride these last few years, and particularly so since the start of the pandemic. And while the for-sale market in many major markets has led to increasingly stiff competition and bidding wars among homebuyers, renters had a tremendous leverage during the summer, autumn and winter months last year.
However, another major theme around housing during the pandemic has been the notion that both buyers and renters are choosing to move away from larger cities and settle into places with a lower cost of living and more space. There’s been a lot of discussion about a “back to the burbs” movement, or even just a major migration out of major metros.
Zillow’s latest rental report counters this trend and goes as far as to suggest that the “death of the major city” narrative often discussed in the last year and a half has been “greatly exaggerated.” They offer the numbers to back up this claim as well.
According to the Zillow report, half of the renters surveyed indicated that they moved within the same city. Even more, one in ten who moved stayed within the same neighborhood. Nearly 40% of renters surveyed who moved, stayed in the same city, but moved to a different neighborhood. And then roughly 20% of those who moved, ended up in a different city within the same metro area.
“Data suggests that the mass exodus of renters from cities that was predicted in the wake of the COVID-19 pandemic never quite came to pass,” the report reads. “In spite of the pandemic and the resulting economic upheaval, many renters have kept their urban lifestyles.”
One trend that Zillow says does have credence is the increasing costs of rent and overall cost of living for many apartment dwellers. Nearly half of the renters surveyed reported a rent hike from their old apartment to new. And renters who live in big cities are more rent burdened — in 19 of the 50 largest metro areas, the typical renter is paying over 30% of their income on housing.
The higher costs of living also come during a time when many folks are already under financial pressure. Nearly 40% of the renters surveyed said that they would not be able to cover an unexpected expense costing $1,000. And most renters would not be able to cover three months of rent payments in the case of a sudden job loss or other major life event.
Coincidentally, it’s the millennials surveyed who were more likely to have a retirement savings — almost half of the millennial renters Zillow communicated with had some form of retirement while less than 30% of Baby Boomers said that they had a retirement account.