Renters More Concerned About Utility Bills Than Rents, Give High Marks to Environmentally-Friendly Properties

utility-billsMCLEAN, VA–(Marketwired – Nov 15, 2016) – The latest Freddie Mac (OTCQB: FMCC) research shows more renters are worried about rising utility bills than rising rents and nearly half of the renters surveyed say they are willing to pay more for rentals with cost-saving water and energy features.

Compared to earlier surveys, the new research also shows more renters saying they are satisfied with their rental experience, but worried about their financial situations. A majority of renters also say they put more importance on saving for emergencies, children’s education or retirement than on down payments for a home. There was also no change in the propensity to rent, with 55 percent saying they expect to rent their next home.

“We will continue to monitor the sentiment of renters closely,” said David Brickman, executive vice president of Freddie Mac Multifamily, “but for now it appears renter concerns about household finances and rising rents may be stimulating less interest in buying a home and more on renting one with cost-saving features.”

Conducted in September for Freddie Mac by the Harris Poll, the findings are based on responses from 1,362 renters including Millennials (aged 18-34), Gen-X’ers (35-49) and Baby Boomers (50-68).

For the first time, the Freddie Mac survey included questions about renter perceptions and concerns about utility costs. Seventy percent of renters say they are moderately to greatly concerned about higher utility bills. By contrast, only 63 percent shared the same levels of concern about potential rent increases. Seventy-four percent say higher utility bills would have some impact or a great impact on their household finances, almost as many as those who said the same (78 percent) about higher rents.

A large majority (88 percent) agreed multifamily properties with green energy- and water-saving features would help reduce their utility bills, with 84 percent saying green properties are generally better places to live.

Nearly half (47 percent) say they are willing to pay more for an environmentally-friendly rental. Renters in the South (52 percent) and West (49 percent) were more likely to say they would pay more than those in the Midwest (39 percent) or Northeast (44 percent).

“Our research confirms the opportunity for investments in energy efficiency to provide a competitive advantage to Multifamily property owners and managers,” said Brickman. “Given the significant burden already posed by rising rents, it is striking that so many are apparently willing to pay more for properties with features they believe will reduce their utility bills.”

Brickman noted the results also underscore the value of Freddie Mac Multifamily’s Green Advantage, which enables borrowers to increase the size of their loan to finance. Energy- and water-saving features in workforce housing and older properties.