Americans are shifting their preferences from renting to home buying, an analysis by TransUnion for the first quarter of 2017 showed.
The study showed 55% of those who shopped for a mortgage in the first quarter of 2017 were non-homeowners, most of whom were renters. This is a significant increase from the first quarter of 2016 when that number was 50% and from the first quarter of 2016 when it sat at 45%.
“The rental market has seen sustained growth for the last several years, but occupancy rates have flattened from their peak in the second quarter of 2016,” said Mike Doherty, senior vice president of TransUnion’s rental screening solutions group.
“This new uptick in mortgage shopping could be a precursor to further declines in occupancy, which would impact rent growth, and ultimately, revenue, for multifamily property owners,” Doherty said. “In anticipation of this potential shift, owners and property managers should be offering the right amenities and programs designed to attract renters.”
Millennial interest in homeownership has been steadily growing, the TransUnion study showed. In 2017, 29% of non-homeowners who shopped for mortgages were Millennials. This is up slightly from 28% in 2016 and 27% in 2015.
“Property management companies should consider new services such as rental payment reporting to credit bureaus to entice renters into their multifamily properties,” Doherty said.
“In many cases, renters are more likely to choose a unit if their property manager reports their rental payments,” he said. “Our survey data show that most renters prioritize their rental payments and want their payment reported.”
Previously, TransUnion found 51% of renters were more likely to choose a property if they knew their landlord would report their payments to credit bureaus, and 79% of respondents said they prioritize rental payments above all other monthly bills.