Remember late last year when Manhattan apartments were renting at ridiculously low rates in an effort to lure people back to the city? TikTok was teeming with videos of realtors showcasing $1,500 per month apartments with in-suite laundry and private rooftop decks. Well, those sales tactics apparently worked because rental applications are up 95 percent compared to last year in The Big Apple, according to a new report conducted by RENTCafé.
New York staged the biggest comeback nationwide, with its rental application volume doubling year-over-year during the first half of 2021. San Francisco ranked second, recording a 79 percent jump in prospective tenant interest. Meantime, rental applications surged 55 percent annually in Seattle and 54 percent in San Jose.
Renter interest also picked up in Washington, DC (41 percent), Philadelphia (39 percent), Detroit (38 percent), Chicago (38 percent), Denver (33 percent), San Diego (33 percent) and Oklahoma City (31 percent), just to name a few.
In commentary accompanying the report, RENTCafé senior writer Nadia Balint wrote that “[nationwide] renting activity is back to pre-pandemic levels — up 13% in the first half of 2021 compared to the same time last year.” Demand is being driven by Zoomers, many of whom are first-time renters, and Millennials earning over $100,000 who are on the hunt for luxury apartments with greater living space.
When broken down by generation, Gen Z rental activity climbed 39 percent over the same period last year. For comparison, the number of rental applications submitted by all other age groups increased by 10 percent or less. At 45 percent, Millennials still make up the largest share of active renters, but that figure declined by eight percent compared to 2020 as Millennials have now entered their prime homebuying years.
Renters earning over $75,000 — many of whom held onto their jobs during the pandemic — moved at a higher rate than their lower-earning counterparts. Rental applications rose 33 percent annually among those netting $75,000 to $100,000 and 34 percent annually for those taking home more than $100,000.
“The need for larger, better living spaces to accommodate working from home and a more comfortable lifestyle were the primary reasons that renters began searching for a new place,” wrote Balint. “Notably, the highly competitive real estate market may also be a factor for some high-earners who are holding off buying in favor of renting.”
Rental activity accelerated in all 30 of the markets studied by RENTCafé, most notably in cities on the east and west coasts. “In a majority of these hubs, the number of renters on the move increased even above pre-pandemic levels, revealing the strong appeal that big city life has retained,” added Balint.