How Does Seasonality Impact Rent Prices?
Apartment searches and moves follow a seasonal trend, known as seasonality. Searches tick up from December to January and grow steadily to their July peak, while moves increase in March and ramp up dramatically to their peak in August.
Renters that start their search at the beginning of the year take longer to move, but still move in at almost the same rate as peak month searchers.
Rent prices also follow a seasonal trend, lagging move-ins, tending to peak in late summer/early fall before cooling in the winter months.
Renting, like sports and produce, follows predictable seasonal patterns each year, commonly referred to as “seasonality.” Seasonality has a significant influence on the rental market, not only impacting rent growth but influencing the daily decisions of property managers, leasing agents and renters. Our Apartment List team of researchers has put together must-know data on seasonality to help understand price trends in the rental market.
When is the moving season?
Although renters move year-round, certain times of year are more popular than others, with moves peaking in August. Interestingly, but not surprisingly, apartment searching and moving follow slightly different trends. Searches for apartments jump from December to January and then ramp up gradually through the spring and summer months. Apartment searches peak in July, before tapering off in the final three months of the year. Moves, on the other hand, are relatively quiet at the start of the year, before ramping up dramatically from March to their August peak. Further, the shapes of these curves demonstrate that users who search in the beginning of the year tend to be starting their search earlier than someone who is beginning in July or August and operating on a more compressed timeframe.
Why does moving have a season?
Summer is the most popular time of year to move for a few reasons. First of all, the fall is a common time to start new jobs, both for recent college graduates and those making a career switch. Second, renter families often wait to move until the summer to avoid moving school districts mid-year. Third, moving in summer is more practical in many locations. In a cold, snowy city, such as Minneapolis or Chicago, moving in winter can be logistically challenging. Icy roads could cause movers to cancel, and snowstorms can delay entire moves. Additionally, most renters prefer not to move over the holidays, a time of year filled with out-of-town guests and vacations.
How Big An Impact Does Seasonality Have on Moving?
As seen above, many more renters start their search at the beginning of the year than actually move then. And these renters are actually different both in terms of how many of them eventually move and how long it takes them to move. Renters who start their search and contact properties at the beginning of the year seem to be “planners” who on average take longer to move than renters who start their search in the summer. In fact, of renters who start their search in July, 25 percent more of them will move in the next 30 days as compared to renters who start in January. The converse is also true, 22 percent more of January renters will take more than 90 days to move compared to their July counterparts. Although many of the January renters who start searching early eventually do move, early season renters are more likely to be window shoppers. Renters that begin their search in the first quarter of the year are 10 percent less likely to actually move than those searching in the peak summer months
Rent prices, as you’d expect, follow the laws of supply and demand. Rents increase most during spring and summer as demand increases (more renters are looking to move) and as supply becomes constrained (vacancies are filled by all the movers), before slowing in the fall through early-winter as demand tempers.
How are renters impacted by seasonality?
For renters with some flexibility, December or January are the best times to move. Rent prices tend to plateau or decline, offering cheaper rents than other times of the year. With fewer renters hunting for apartments, landlords may be willing to offer better deals to avoid having a vacant apartment during the winter. The risk of moving in winter is that with fewer units opening up, the selection is more limited than during the summer months.
While prices tend to be higher in the summer season, more movers mean more units becoming available and more options to consider. Renters looking to move in summer should start looking early to capitalize on prime openings and allow flexible move time to snag prime apartments. When search volume peaks in June and July, property managers and leasing agents are receiving more leads than any other time of year so renters must be extra proactive about contacting properties. Additionally, renters should be prepared to move fast in summer months because property managers and landlords have more potential renters to choose between for a vacant apartment.
Apartment searches tick up from December to January and grow steadily to their July peak. Moves, on the other hand, begin ticking up in March and increase dramatically to their peak in August. As moves begin slowing down in the fall, rent prices tend to drop, as demand softens. For renters, moving in the “off-season” (December or January) can offer deals, while moving in peak-season (July or August) offers the best selection of rentals.