Rental approvals up: Which generations are most apt to apply?

More than 60 percent of today’s rental applicants are millennials.

But a younger generation may be catching up. A recent report from Rent Café found that Generation Z, the generation following millennials, represent 9.2 percent of the renting population. In the past three years, Generation Z’s rental applications have risen from 1.2 percent in 2014 to 9.2 percent this year. Generation Z has the highest acceptance rate, at nearly 92 percent, while Generation X has the lowest at 77.5 percent.

With nearly 37 percent of the U.S. population renting, application approvals are also up, hitting 83.2 percent in the second quarter of this year, a 1.5 percent increase from 2014.

The most typical reason for an applicant to be denied is because of accounts in default or collection, which represents one-third of rejections and 12 percent are denied due to criminal history. Less than 8 percent are denied because of their credit or income. Applicants in February are the least likely to be approved, while May and June see the highest approval rates.

The majority of renters (50 percent) are aiming to live in a “mid-level” rental building, while 27 percent are applying to live in low-end rental buildings, and 23 percent aim to live in high-end rental buildings. The high-end rental buildings have the highest rental application approval level.

In Pennsylvania, Philadelphia was the only market analyzed. There, millennials also dominate the rental application market, representing 64 percent, followed by 16.9 percent baby boomers, 9.6 percent Generation Z and 6.8 percent Generation Z. For those approved for rentals, the average salary is $79,600. Philadelphia is one of the most renter-friendly markets, with more than 89 percent of applications approved, more than 6 percent higher than the national average.