- A growing number of landlords in the US are providing incentives to draw in renters, reports Zillow.
- The housing market has seen an uptick in inventory following the pandemic, offering renters additional choices.
Landlords Ramp Up Incentives to Attract Renters
In many regions across the United States, apartment owners are implementing generous incentives aimed at attracting tenants. However, not all urban areas are making equal efforts to allure potential renters.
During July 2024, six metropolitan areas—including Raleigh, Charlotte, Atlanta, Salt Lake City, Nashville, and Austin—recorded that over half of their rental listings on Zillow were offering perks. These benefits varied widely from complimentary parking privileges to several weeks without rent obligations.
The Impact of Expanding Housing Supply
This surge in tenant incentives can largely be attributed to a rise in available apartments stemming from new constructions initiated during the pandemic period. According to Skylar Olsen’s insights as outlined by Zillow’s chief economist: “The growth trajectory for concessions aligns with increasing inventory levels.”
Recent statistics reveal that national vacancy rates held steady at 6.6% through the second quarter of 2024—a figure consistent with last year—indicating a substantial increase since 2021. A higher number of vacancies grants potential tenants greater freedom and compels landlords to enhance their offerings.
While average rent prices have climbed by 3.4% annually nationwide according to Zillow’s data for July 2024—tenants have also witnessed an upward trend in available concessions over recent years. The proportion of rental listings featuring these benefits increased significantly from 19.4% in July 2022to an impressive29 % reported last month.
Relief for Renters Amid Rising Costs
The recent uptick in concessions could serve as a vital relief mechanism for those relocating or seeking new accommodations amidst soaring rents—a longstanding issue prompting many tenants nationwide to allocate a significant portion of their income toward housing expenses.
Conversely, residents navigating the affordability crisis within New York and Miami may find themselves missing out on these beneficial trends. With concession rates falling at just15 %and17 %for both cities respectively—these figures stand among the lowest nationally this past month due largelyto relative stagnationin apartment construction comparedtothese cities’population inflow trends.
In fact,some other locations report even less availability when it comes torental perks: merely10 %of propertiesin New Orleansoffer such advantages while San Jose,Baltimore,M ilwaukee,and Pittsburghactually observed declines year-over-year regarding listings featuringconcessionsaccordingto Z illow’s findings.
Olsen summarized this development concisely:“While rents remain onan upward path,it is notably moderate comparedtothe steep hikes experiencedtwo orthree years ago;morethanhalfofrentals insomeareasnow feature attractivesweeteners.”She added that fluctuations inthe job market coupledwithlower mortgage interest ratesmay eventually result insmaller increases—or potentially decreases—inrental pricing ifcurrent patterns continue onward.”
