Among the large swath of renters looking to make a move in 2022, nearly 42% are planning to buy a home, according to a recent survey from Zumper. Whether they can or not may go a long way in defining the trajectory of rent prices this year.
A whopping 81.6% of renters responding to Zumper’s year-end 2021 survey indicated that they plan to move in 2022, prompting the rental website to perform a follow-up poll on such renters. Of renters planning to move this year, 41.7% said they intend on buying — a significant response since skyrocketing home prices are a key driver of similarly rising rents.
Soaring home values, of course, price out renters who would otherwise be leaving the rental market in favor of homeownership. Renters who wade into the buying pool usually have higher incomes relative to other renters, so when more of these renters are frozen out of homebuying and left in the rental market, it tends to push rent prices upward.
Thus, if the renters who are hoping to buy are able to do so, much of the upward pressure on rents would ease. That’s a big if, however, as housing demand remains strong and forecasts for home prices currently aren’t kind to first-time homebuyers. Zumper noted that Goldman Sachs, for example, projects home prices to rise another 16% in 2022.
Meanwhile, interest rates are already on the rise and the Federal Reserve’s recent telegraphing of at least three hikes to its baseline rate this year could push them up even faster. It’s likely that many renters who are looking to buy, despite their initial intentions, will end up having to remain in the renter pool for the time being.
Of the other renters planning on moving this year, 36.4% intend on moving to a new apartment while 21.9% are planning to pursue a single-family rental. Moreover, regardless of the type of housing that current renters are looking to move into (or whether they’re looking to rent or buy), they aren’t planning on moving very far. Planned moves within the same city comprise 39.3% of respondents to Zumper’s survey, with another 28.5% intending to stay within the same metropolitan area.
Asked whether they are moving to an urban, suburban or rural area, 51.5% said they aren’t looking to change the type of setting where they reside. Some 19.3% reported that they are planning to leave an urban area for a more suburban environment, following a migration trend that started before the COVID-19 pandemic and was exacerbated by the health crisis-driven trend away from population density.