Americans are showing more willingness to move, and those in that category are feeling richer, according to Apartment List’s latest Quarterly Migration Report. Tenants choosing to relocate now have higher-cost homes and higher budgets, which is placing added pressure on an already competitive rental market.
Nearly 32% of Apartment List users, a growing percentage, said they’re searching for homes in a new metro area. Also, apartment hunters increased their budgets by 6.5% in the latest quarter, a larger jump when compared to previous quarters. Consumers moving longer distances or making cross-metro moves have the highest budgets.
“The pandemic unlocked new geographic flexibility for workers at the highest end of the income distribution, thanks in large part to the widespread adoption of remote work,” researchers write for Apartment List in the report. Also, “historically-low inventory in the for-sale market is keeping many of these high-income renters in the rental market longer.”
In the second quarter of this year, Apartment List users were willing to spend an average of $1,335 per month for a new apartment, a record high and a 6.5% increase compared to one quarter earlier. For comparison, in previous years, budget increases typically rose at a 2.3% or 2.6% rate.
The higher budgets are putting a strain on smaller rental markets. Newcomers to any given metro have, on average, a 15% higher budget than existing residents who are also searching for a new apartment, according to Apartment List’s study. This gap is evident among the 100 largest metro areas tracked, the study notes.
Apartment List predicts that migration trends likely will continue to drive up prices over the coming months.