Markets & EconomyRentals

Homebuying not the primary driver of tenant moves

Low homeownership rates and high home values are affecting tenant moves

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Why are renters vacating their homes? If you think it's because they're buying, well, that applies to only 1 in 10 renters. A 5 percent increase in home values coupled with cyclically low homeownership rates -- 63.7 percent as of the first quarter -- equate to a multifamily sector where only 1 in 10 renters vacate a unit because of a home purchase. For real estate investment trusts (REITs), managers and other owners, move-outs due to homeownership are a minimal concern during the remainder of 2015. On average, REITs report that roughly 11.5 percent of tenants currently cite the purchase of a home as their reason for moving out. Essex Property Trust, in its recent quarterly earning call, stated that only 9.8 percent of its move-outs are the result of home purchases. Equity Residential (EQR) has seen its percentage of move-outs due to homebuying dip to 11.9 percent, the lowest percentage its seen since 2012. During the first quarter of 2015, 1,296 tenants moved out of EQR...