Renter Migration Patterns Drive 42% Increase in Out-of-State Applicants as Renters Seek … – The Bakersfield Californian

Posted: June 24, 2022 at 1:48 am


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SAN DIEGO, June 23, 2022 (GLOBE NEWSWIRE) -- Out-of-state applicants for rental properties increased 42% from 2020 to 2021, according to a new analysis of TransUnion (NYSE: TRU) data. In that same period, rental applications in rural areas increased 28%, while urban rental application volume rose just 10%. The primary driver of these trends appears to be rising housing costs and the widespread availability of remote work, which began during the COVID-19 pandemic.

TransUnion is presenting its findings at the National Apartment Associations Annual Apartmentalize conference. They are also available in the Quick Guide, How COVID-19 and Remote Work is Reshaping U.S. Rental Demand.

With remote work firmly in the norm, weve seen renters actively seeking new locations that better suit their budgets and lifestyles, said Maitri Johnson, vice president of tenant and employment screening at TransUnion. While many are going out-of-state to sunnier environments, were also seeing a preference for rural areas and exurbs that have more space and a lower cost of living, but also a relative proximity to cities and airports.

Texas saw the largest increase between 2020 and 2021, with more than 310,000 new residents. Meanwhile, New York had the highest decrease, losing more than 319,000 residents. Generally, the cross-state migration patterns show more people leaving the Rust Belt and Northeast in favor of the Southern Atlantic and Mountain states, as well as Arizona and Texas1.

Affordability an issue

Overall occupancy of U.S. rentals reached a record 98% in January 20222. This may have been driven in part by an influx of homeowners who capitalized on their home equity by selling while housing prices were at an all-time high, and renting until valuations come back down. When looking at rental applications from 2020-2021, there was a 37% increase in applicants who had sold their home within the past year and a 16% increase among applicants with an outstanding mortgage.

The higher costs for home purchases simultaneously kept many younger adults from becoming first-time homebuyers. However, the same inflationary trends have impacted affordability in the rental market as well. Rent prices increased 14% between 2020 and 2021 while the median income of applicants has only increased 6% over that same time. Predictably, delinquencies on rent payments have increased. Whereas on-time rent payments were at 96% in January 2020, they had dropped to 92% at the end of 20213.

Demand is clearly very strong right now, which is all the more reason for a thorough rental application screening process with an emphasis on income and debt ratios and their effect on affordability, said Johnson.

Incoming immigration boom

There are signs that the housing market is cooling down as the Fed has bumped up interest rates several times already this year, which means renters can expect to continue renting until economic stability is regained. That said, TransUnion analysis suggests immigrants may well buoy the rental markets high demand over the long term.

Citing data from the U.S. Census Bureau and Joint Centers for Housing Studies of Harvard University, the report provides highlights about this populations participation in the rental market.

In 2022, immigrants represent more than 14% of the total U.S. population. That percentage is expected to grow through 2060, when the U.S. Census Bureau projects immigrants to represent 17% of the nations population4.

Because people who immigrate to the U.S. tend to remain renters for long periods, there is likely a compounding effect to this sustained increase, said Johnson. The current demand resulting from the housing market may subside as home prices come down, but this population will likely keep rental demand elevated over the coming decades.

As immigrants navigate the housing market, they may have questions about how credit works in the United States. This TransUnion blog answers common questions about building credit as an immigrant, including tips on how to establish a credit history.

Tips for renters

As with owning a home, renting can have an impact on consumers credit. For starters, a rental application may include a credit check. Depending on the service your landlord uses, this may result in a hard inquiry on your credit report, which can cause a temporary dip in your score, said Margaret Poe, head of consumer credit education at TransUnion.

However, consumers should know that monthly rent payments could be a boon to their credit health, as well. Payment history is one of the major credit score factors, so if your landlord reports your monthly rent to the credit reporting agencies and youre consistently making on-time payments, the history of that account will reflect positively on your report, said Poe.

For more information about the research, read the Quick Guide, How COVID-19 and Remote Work is Reshaping U.S. Rental Demand.

About TransUnion (NYSE:TRU)

TransUnion is a global information and insights company that makes trust possible in the modern economy. We do this by providing an actionable picture of each person so they can be reliably represented in the marketplace. As a result, businesses and consumers can transact with confidence and achieve great things. We call this Information for Good.A leading presence in more than 30 countries across five continents, TransUnion provides solutions that help create economic opportunity, great experiences and personal empowerment for hundreds of millions of people.

http://www.transunion.com/business

Originally posted here:
Renter Migration Patterns Drive 42% Increase in Out-of-State Applicants as Renters Seek ... - The Bakersfield Californian

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June 24th, 2022 at 1:48 am




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