Consumer sentiment toward buying a home is at an all-time low, according to Zumper’s 2023 annual rent report.
For a second year in a row, Zumper has found in its annual survey of renters that more than half, 52.7%, believe “the new American dream is being untethered to homeownership.” This is up from 51% in 2022.
Nearly three-quarters of respondents, 73.8%, said they do not think it’s a good time to buy a home, while 38.5% said they never plan to buy a home. In addition, over half of the respondents, 53%, said they think they are getting a good deal on rent.
“The new math behind the decision to rent or buy has been well documented, but this isn’t a temporary shift that’ll reverse once interest rates come back to earth,” said Zumper CEO Anthemos Georgiades. “Renting a home is now widely considered a viable and appealing option for all types of Americans.”
Zumper’s report also found that migration numbers are starting to settle after the relocations spurred by the pandemic. Nearly 30% of respondents said they’ve moved in the last year, which is down from 34.1% in 2022’s year-end report.
Looking ahead to the new year, Zumper shared its predictions. It noted that several factors—including economic uncertainty, a presidential election, changing consumer attitudes, and historic levels of new supply—will impact the rental industry over the next 12 months.
“For the first half of 2024, occupancy will likely continue to hover at around 95%, and it might look like the market is stagnating,” said Shawn Mullahy, senior vice president of sales at Zumper. “In reality, there will be significant movement from people opting out of buying a home—but that number will likely be absorbed by the massive amount of new supply coming online.”
Even as inflation begins to ease and interest rates inch down, Zumper said it expects consumers to continue proceeding with caution, especially when it comes to buying a home.
“Interest rates will ease, and there will be some degree of relief in the home buying market, especially in the second half of 2024, but we’re not going back to 2.5% mortgages anytime soon. What we’re seeing is a fundamental shift in how Americans view the entire real estate market,” added Georgiades.
Additional highlights from the report include:
- The national one-bedroom median rent is down year over year by a tenth of a percent at $1,496. It also is down 0.2% in December compared with the prior month;
- The national two-bedroom median rent at $1,847 is up 1.4% year over year but down half a percentage point month over month;
- Of the 100 cities on Zumper’s list, 55 are seeing median rents down year over year, while 17 are flat; and
- New York remained the most expensive city in the nation in 2023. In December, the median price for a one-bedroom is $4,160, an 11.2% increase year over year. The median price for a two-bedroom comes in at $4,800, a 10.2% year-over-year increase.
