Retention Rates See Record Increases
Digested from “More MF Tenants Opt to Stay As Rents Rise”
GlobeSt.com (9/14/15) Bubny, Paul
Despite a 5.4 percent increase in monthly rents, 51.1 percent of renters whose leases were up for renewal last month chose to stay in their existing apartment communities — a 300-basis-point increase over August 2014. It is the highest retention rate increase in nearly 10 years, and it marks the continuation of a 20-month trend of retention rates above 50 percent.
Normally, rent hikes would cause residents to look for cheaper apartment homes, especially with the amount of new supply scheduled to come online. But as renting becomes more popular than owning, demand continues to remain strong, keeping retention rates high as well.
Retention rates were highest in the Northeast and Midwest, compared to the South and West, which attract younger renters because of job growth and are more ripe for turnover.