Markets & EconomyRentals

Homebuying not the primary driver of tenant moves

Low homeownership rates and high home values are affecting tenant moves

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...