Dissatisfaction a Key Determining Factor for Multifamily Renters Who Decide to Buy

Posted on August 28, 2015

Satisfaction with one’s rental experience may be a factor when deciding to buy a home. According to new Freddie Mac research, renters who are most satisfied with their rental experience are more likely to continue renting (68%) than to purchase a home (32%).

And it seems multifamily apartment renters are more satisfied than single-family property renters.

According to new Freddie Mac, 67% of apartment renters report being satisfied compared to 60% of single-family property renters. Freddie Mac’s research also shows that people renting single-family properties (renting a house/townhouse or condo) may be more likely to buy than those in apartments. In the U.S. about 15 million households rent a single-family house and 25 million rent an apartment, according to U.S. Census Data.

The latest research, conducted in June 2015, shows 55% of renters of both of single-family and multifamily properties plan to continue to rent in the next three years. Single-family renters are significantly more likely to say they expect to buy than multifamily renters (53% vs 36%) when asked about their plans in the next three years.

“As we gather data each quarter, we are finding the old perception that renting is something people do until they buy is not always true. The trend shows that satisfied renters are more likely to continue renting, even as we are seeing rising rents in the market,” said David Brickman, executive vice president of Freddie Mac Multifamily. “Dissatisfaction may drive renters to buy, and we are seeing a slight decrease in satisfaction among single-family renters. We will continue to monitor this for stronger indicators and trends, but for now, the single-family rental home market may be a good place to look to find potential home buyers.”

Brickman added, “The number of U.S. renter households is up again for the 10th straight year, according to the U.S. Census Bureau. More households of all sizes, income levels and age ranges now rent their homes. Renters are leading household formations, which are expected to keep climbing due to the improving economy, Millennials continuing into adulthood and immigration.”