Tag: experian housing

Property managers and landlords nationwide aim to attract reliable, long-term tenants. Gaining insight into modern renters—their tenant data, financial situations, lifestyle choices, and key priorities—gives proactive property owners and managers a competitive edge in appealing to the ideal tenant. While certain elements of the rental landscape are not within the control of market professionals, knowledge is power, and understanding the preferences, spending habits, and profiles of today’s renters can inform their business approach and success. To understand today’s renter, Experian® took a deep dive into the tenant data of the rental market landscape in its 2024 report on the U.S. rental market. Among the principal findings, Generation Z and younger millennials' dominance in this sector is rising. Today’s Renter Profile Experian research reveals movements in the demographics of the average U.S. renter, now dominated by younger individuals and lower average-income consumers. These renters face challenges as they navigate the rising costs of securing housing. The 2024 rental report delves into these changes, highlighting age and income level shifts in tenant data. Critical to property managers and landlords, this information offers an understanding of their customer base and provides insight into the rental market landscape. Gen Z on the Rise: Gen Z alone accounts for 30.5% of all renters, and their numbers are increasing, up 3.5% over a year. Gen Z and younger millennials (adults under 35) represent over 50% of the rental population. Income Declines: From January 2023 to January 2024, the tenant data showed the average income of RentBureau® renters fell from $53,100 to $52,600[1]. Higher Rent Costs: In 2024, over 50% of renters paid $1,500+ per month, with the average U.S. renter's monthly payment of $1,713. Gen Z,the youngest renter population, spends an average of $1,600 monthly on rent. This context plays an important role in examining the state of the 2024 rental market. Propensity to Move In addition to age and economic well-being, landlords should take a keen interest in tenant data related to renters’ moving habits, as these provide valuable insights into behavior and market trends. Landlords generally prefer longer-term leaseholders, and renters who stay longer provide more stability to property management efforts. Not surprisingly, generational trends appear here as well. While over 90% of all renters retained one lease over a 2-year period, tenant data indicates that Gen Z and younger millennial renters tend to move more than other age groups. This tendency stems from various factors, including a willingness to relocate to more affordable regions or areas that better suit their lifestyle preferences. With today’s evolving work environment, remote work has opened new possibilities. Again, the overarching trend is that renters stay in one place for two years. In fact, this represents 92.5% of all renters. Signs of Overall Renter Financial Health Housing is a significant monthly cost of living expense, especially for many younger adults just starting out and lower-income individuals and families. The percentage of a renter’s monthly income allocated to rental costs clearly indicates housing affordability. This tenant data reflects that higher rent-to-income ratios (RTIs) signify that renters have less financial flexibility, as a larger portion of their monthly income is allocated to rent, leaving less available for essentials, savings, and discretionary spending. On average, renters spend over 44% of their monthly income on rent, and low-to-moderate-income renters dedicate over 50% to rent. General guidelines suggest that the percentage should be no more than 30%. Higher rental costs and declining annual incomes disproportionately impact those with fewer financial means. Credit and Other Signs Landlords and property managers value tenant data, such as renter applicants' stability. Indicators such as overall credit quality and negative payment history provide valuable insights into economic well-being. While negative payment history has improved slightly, the market shows a rise in delinquencies. Experian’s research highlights that while credit scores for the general U.S. population are on the rise, the trends for renters tell a slightly different story. Between May 2023 and May 2024, tenant data revealed a 2% increase in renters fell into the near-prime and subprime credit categories. Although the implications for the future remain uncertain, this data, combined with other analytics, may offer clues about market trends and opportunities. The Future The demand for rentals remains high, particularly among young adults and lower-income households. As the economy and market forces fluctuate, so do the financial pressures on renters and rental housing availability and costs. The role of young adults and lower-income households in the rental market will continue. Landlords and property managers must tune in to demographic realities in their efforts to develop risk management and success strategies. To learn more about the state of the U.S. rental market, download Experian’s 2024 rental report. [1] RentBureau income is based on modeled income, which is estimated using credit data and other predictive factors.

The Experian Vision conference is an annual event hosted by the leader in global information services. Vision 2024, held in Scottsdale, Arizona, from May 20-23, gathered industry leaders, data experts, and business professionals to discuss the latest trends and innovations in data and analytics. Aligned with the theme of “Powering Opportunities,” Vision 2024 featured breakout sessions offering attendees valuable insights and strategies for using data to drive business growth and success. Here are the highlights from three of the sessions focused on housing topics. Two industry experts, Sam Khater, Chief Economist at Freddie Mac and Susan Allen, SVP of Product, Experian Housing, engaged in a lively and thought-provoking discussion. The program covered the current state of the mortgage market. Susan and Sam took turns presenting their findings, exchanging ideas, and sharing their perspectives about where lenders could see opportunity in the current challenging mortgage market. They identified these current challenges and opportunities for lenders and borrowers. The economy continues to expand at a solid growth rate. Consumer spending remains firm, and the labor market is tight. The healthy economy is causing inflation and interest rates to remain higher for longer. Home purchase demand is coming off cyclical lows, but home sales remain low with mortgage rates remain above 7%. Inventory is improving modestly, but it remains very low due to chronic undersupply. The dynamic of low home sales, and even lower supply will continue to pressure home prices to increase, especially given many borrowers are moving to more affordable markets more frequently than in the past. There are 46 million likely qualified non-homeowner consumers, of which 7 million appear ready for first time homeownership. Although affordability remains a significant challenge, there are geographic regions where aspiring first-time homeowners are finding better success. Lenders are pursuing data-driven, nuanced approaches to identify and successfully reach these consumers. Three recognized industry professionals headlined this panel discussion. Eric Czajka, VP of Governance and Oversight at Rocket Companies, Experian Housing’s Susan Allen, and Product Manager for Experian Housing, Angad Paintal, shared their insights with a review of recent innovations from Rocket, including specific Experian solutions that are supporting Rocket’s consumer engagement strategy. Lenders in attendance also learned the next steps they can take to win borrowers that ready to consider a refinance. Experian showcased what’s possible with the combination of multiple data sources in a user-friendly interface to help lenders prepare for a rate reduction, including the potential triggers for conventional refinance, VA refinance and FHA refinances. Each segment needs to move 50 basis points to make the possibility of a refinance reasonable for the borrower. Vision 2024 continued with a casual conversation between Newrez COO Joshua Bishop and Chris Travis, Software Sales Expert at Experian. Participants experienced a glimpse into recent developments in mortgage technology from the Newrez leader and how these advancements reflect the industry. The program featured an exchange of questions and answers centered around three crucial topics that have significant implications for housing industry growth and development. These include economic uncertainty (interest rates, refinances, and delinquency trends), government regulations and policies (Basel III, CFPB) and technology (big data and generative AI). The key takeaway from this session was that the mortgage industry is undergoing a tech revolution. Lenders and servicers are utilizing predictive models to assess risk and personalize communication, while generative AI streamlines document processing and provides a cleaner experience for internal and external users alike. Deep analytical tools provide a clearer picture of borrower finances and hardship resolutions. This technological embrace is transforming the mortgage process, making it faster, more efficient, and more accessible. Be part of the future at Vision 2025 Vision 2024 was a resounding success, bringing together our valued clients to share innovative ideas and forge new connections. We were thrilled by the thought-provoking discussions and the collaborative spirit that permeated the event. As we look ahead to next year's conference, we eagerly anticipate even more groundbreaking conversations and opportunities for growth. Don't miss out - secure your spot now and be part of the future at Vision 2025. Register now