The past year has changed the multifamily industry in more than one way. According to RENTCafé’s year-end report, the COVID-19 outbreak prompted a slowdown in apartment activity, which not only shortened and delayed renting season but hindered rent growth on a national level. At the same time, the multifamily market quickly adapted to the new context with virtual and self-guided tours and an unprecedented push for zero face-to-face interaction rental management technology.

But 2020 also brought about structural changes in the renter segment—Generation Z became the second most-active renter generation, while middle-income renters were the only ones who moved more in 2020.

The COVID-19 Pandemic Delayed and Shortened Rental Season by Two Months

Rental applications usually go up between March and August, the period known as peak renting season. However, the 2020 renting season started only in May, with a 27% uptick in rental applications, and ended as soon as July, with a 13% drop in renter movement.

In the previous two years, renting season started in March, with a 23% increase in renters on the move, and ended five months later, in August, with a 9% average drop. This means that the 2020 renting season changed not only in length and timing but also in renter movement. Renting activity was more concentrated over 2020’s renting season, with a faster initial acceleration and a more pronounced drop at the end of the period.

The slowdown’s impact can be noticed in rent growth trends, as the national average rent stagnated last year at $1,462 as of December.

Renter Activity Dropped in 16 of the 30 Largest U.S. Cities

On a national level, rental applications dropped by 10% in 2020, breaking a years-long ascending trend. The downturn is visible among the country’s largest cities, as 16 saw renter movement decline compared to 2019.

Memphis registered the most pronounced activity drop, a significant 21% compared to last year. With a 16% drop in applications, Chicago saw the second-fastest decline, followed by Louisville (-11%).

Detroit registered the most significant rise in renter movement, 23% compared to last year. However, this surge was propelled by renters wanting to leave the city, as the number of applications from Detroit to other areas increased by 36% last year. In contrast, applications from renters wanting to move within the city and to the city decreased, by 7% and 13%, respectively. New York, which comes in second, is in a similar situation. 25% more renters on the move applied for apartments outside the city in 2020 than the previous year.

Gen Z Replaces Gen X as the Second Most Active Renter Generation

In 2020, Gen Z became the second most active renter generation after Millennials, overtaking Gen X in the process. The youngest renter generation accounted for 23% of rental applications nationally, up from 17% in 2019. Gen Z was also the only segment that became more active last year.

Meanwhile, the share of applications from all other generations has been shrinking. Millennials now account for 47% of rental applications, after making up at least half of renters on the move in the previous two years. Gen X rental applications are also decreasing, albeit at a slower rate, and now make up 18% of all rental requests.

Renters’ Incomes Stagnated Last Year, Breaking an Upward Trend

After a two-year upward trend, the median renter income reached a standstill last year, stagnating at $38,400. By comparison, renter incomes went up by 1.5% in 2018 and an even faster 5.1% in 2019.

At the same time, middle-income renters were the only ones to become more active last year. The share of renter movement from those earning between 25 thousand to 75 thousand rose by 5.9% in 2020. Renter applications from all other income brackets dropped, especially when it comes to wealthy renters, who moved 7.6% less compared to 2019.