The Rise of 'Standby' Apartments

March 15, 2023

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THE BIG SPLASH

The Rise of 'Standby' Apartments

What's important to know:

Landing, a subscription-based nationwide rental network of furnished apartments, is offering a new residential option called "Standby" living, aimed at people seeking maximum flexibility, including remote professionals, contract workers, and those relocating to a new city. However, the catch is that tenants might have to move with three days' notice.

  • Landing's standard members pay $199 annually for access to rent one of the company's 20,000 apartments in more than 375 cities.

  • Rent is month-to-month, starting at a minimum of 30 days, with the best rates for those who commit to six months.

  • Standby members have access to the same fully furnished listings, except in New York and California, where short-term rentals are restricted.

  • If a standard member wants their apartment, Standby members get three days' notice to transfer to a different Landing apartment at no additional cost.

  • The average renter currently spends over 36% of their gross income on housing.

A SCOOP OF MORTGAGE

Mortgage Applications on the Rise for Second Week in a Row

  • US mortgage applications increased for the second consecutive week despite volatility in mortgage rates, according to the Mortgage Bankers Association’s seasonally adjusted index.

  • Total mortgage application volume increased by 6.5% last week compared to the previous week.

  • The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances fell to 6.71% from 6.79%, with points falling to 0.79 from 0.80 for loans with a 20% down payment.

  • Despite higher rates, mortgage applications to purchase a home rose 7% for the week but were still 38% lower than the same week a year ago.

  • Applications to refinance a home loan increased by 5% from the prior week but were 74% lower than one year ago.

  • The Federal Reserve may raise interest rates again next week despite recent banking industry turmoil.

A SCOOP OF RENTALS

The Short-Term Rental Boom: a Curse for Renters?

  • The growth of short-term rental listings, such as those on Airbnb and VRBO, may be contributing to rising rents and exacerbating affordability concerns in some US cities.

  • While some cities have put regulations in place to limit short-term rentals and control their impact on housing supply, others have been limited in their ability to do so by state laws.

  • The COVID-19 pandemic has affected the short-term rental market, with landlords shifting to medium-term rentals to target traveling nurses during the pandemic's first year. Short-term rental listings dropped significantly during the pandemic but have begun to rise again.

  • Rising rents have been driven by various factors, including a shortage of building and affordable housing construction, but real estate economists suggest that an increase in short-term rentals is a clear contributor to soaring rent growth.

  • The impact of short-term rentals on housing affordability and rent growth varies depending on the city and its real estate market. Some cities, such as Nashville, have seen the construction of new apartment units offset increases in short-term rentals and prevent significant rent growth.

A SCOOP OF EMPLOYMENT

Employment Is Booming in the Housing Industry

  • The employment-to-population ratio for adult workers with less than a high school diploma surged to 45.5%, the highest rate ever recorded.

  • The construction industry, particularly residential specialty trade contractors, provided some of the best employment opportunities for people who have not completed their high school diploma.

  • The rental housing market, including multifamily apartments and purpose-built single-family rental communities, provides a range of products and flexibility that mobile households seek without the high mortgage rates and falling property values.

  • The collapse of the market for single-family homes built for sale is a major inflection point in the overall U.S. housing market.

  • The February employment report is good news for the most vulnerable workers and households with lower incomes.

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