National renter satisfaction has increased again in the second quarter, with 78.6% of residents reporting “good” or “excellent” satisfaction with their overall renting experience. This quarter’s increase continues the upward national trend that began in the last quarter of 2017.
Similar to the first quarter, every market except Atlanta saw a year-over-year increase in satisfaction this quarter. Boston has the highest overall satisfaction with 83.8%, followed by Chicago with 83.6% of residents satisfied with their living experience. Dallas once again topped out the markets for improvement from the prior year with a 3.5 percentage point increase from this time last year. Chicago and Miami are close behind with 2.5 and 2.4 percentage point increases, respectively. Both Dallas and Chicago also saw the largest year-over-year increases in residents’ likelihood to renew this quarter.
Chicago Has Highest Increase in Value for Amount Paid
National value for amount paid has risen from 60.3% last quarter to 60.8% this quarter. For the second quarter in a row, every major market saw an increase in value for amount paid. Washington, D.C., saw a 3.5 percentage point increase from this time last year, which is especially huge when taken in context with the large decreases in value for amount paid that the District has experienced in the past couple years. Atlanta continues to come first in value for amount paid, with 67.2% of residents satisfied with the value they receive for their rent. Chicago saw the largest increase in value for amount paid with a 7.4 percentage point increase from this time last year. Seattle and San Francisco come in behind Chicago with year-over-year increases of 4.8 and 4.7 percentage points, respectively.
Over the last two quarters, Chicago has seen the largest year-over-year increase in value for amount paid among the top markets. The market has experienced climbing value for amount paid since the third quarter of 2017. This quarter, Chicago was in the top two markets for year-over-year improvement for all key performance indicators. According to RENTCafé, average rent in the Windy City has increased 6% year over year. One would expect increasing rents to drive down value for amount paid. However, there has been a substantial increase in new developments both downtown and in the suburbs. The Chicago Tribune expects there to be a shortage of apartments in the next few years since it appears that development will not be able to keep up with demand. At the moment, renters have new apartments to move into in the places they want to live and the 55% of Chicago residents that rent are happier and more content with their living situation than they were at this time last year.
National Resident Renewal Intentions Reach Seven-Year High
National resident renewal intentions have risen by 1.2 percentage points since last quarter, which is the largest increase in renewal intentions over the last six years. This quarter, 57.5% of residents indicated they were likely to renew their current lease, and all major markets except Miami saw a year-over-year increase in resident renewal intentions. Even Washington, D.C., saw a 0.4 percentage point increase from this time last year, which is impressive compared with the 4.9 percentage point year-over-year decrease the District experienced in the first quarter of this year. Similar to resident satisfaction, both Dallas and Chicago have seen the highest increases in renewal intentions since this time last year; Dallas has increased by 5.3 percentage points and Chicago by 5.2 percentage points. Boston continues to have the highest renewal intention level with 65% of residents indicating they are likely to renew their lease.
Older Residents and Residents with Friends in the Community More Likely to Renew
The graph above shows the breakdown of how likely residents are to renew their lease across five different demographics: household income, age, length of time in current apartment, current living situation, and number of friends at the community. Interestingly, residents with higher incomes are less likely to renew their lease than those with lower incomes. Residents who make over $75,000 per year are less likely to renew their lease than the national average of 57.5%. For residents who make less than $25,000 a year, 64% are likely to renew their lease, which is about 7 percentage points above the national score. The most likely explanation for this phenomenon is that residents who make more money have more potential housing options.
As residents increase in age, their likelihood of renewal increases. Residents 65 and older are 1.5 times more likely to renew their current lease than residents younger than 25. There is an interesting dip in residents’ renewal intentions as they spend more time at their community. Residents who have been at their community between one and three years have the lowest renewal intentions. Less than 12 months or more than three years at the community, and residents’ renewal intentions rise. Residents who have been at the community for six or more years have the highest renewal intentions, with 69% of them likely to renew their lease.
Residents may be in a multitude of different living situations, but it appears that some with roommates may be unhappy with their situation. Residents who indicate they are single but live alone are 62% likely to renew whereas those who are single but living with a roommate are only 54% likely to renew, which is well below the national average of 57.5%. Residents living with family (partner, children, or partner and children) have roughly the same renewal intention as those who are single and living alone.
The number of friends that a resident has within their community has an unexpectedly large impact on a resident’s renewal intentions. Residents who have at least one friend within the community have a renewal intention 5 percentage points higher than residents with no friends within their community. Residents with more than five friends have renewal intentions nearly 10 percentage points higher than residents without any friends within the community. This lends some credence to the recent rise in management companies trying to foster relationships and friendship among their residents with events and activities: Residents with friends at the community are more likely to renew.