WFH Rental Demand Has Dropped by 20%

According to the 2023 American Community Survey, there are 4.0 million rental units in the US headed by someone who works from home (WFH). This is down from 4.5 million in 2022, representing a 9.9% pullback. Further, this is the second consecutive year that WFH rentals have dipped, following the peak of 5.0 million households in 2021. In aggregate, between 2021 and 2023, WFH rental demand has slid by 1.0 million households (-20.1%).  

WFH rental households were on the rise leading up to the pandemic — albeit gradually. Between 2010 and 2019, WFH renter households grew every year, with annual gains ranging from 2% to 11%. Of course, the pandemic upended labor dynamics writ large, permanently altering the balance of in-person and remote work. WFH renters skyrocketed by more than 200% in 2020 and rose again by about 18% in 2021.  

Despite the past two years of declines, the nature of remote vs. in-person work remains in a very different place than it was entering the pandemic. Through 2023, the total number of full-time WFH workers (22.6 million) remains up by 152% compared to pre-pandemic. For WFH rental households, the 2019-2023 gain is even larger at 184%.

 As we look ahead, two competing truths will impact labor markets and rental markets alike. The prevalence of remote is considerably more widespread than it was a half-decade ago — and Pandora is not going back into her box. At the same time, return-to-office momentum accelerated in 2024, and these data are likely to show continued declines in future releases.

The disentanglement of local rent prices from local wage dynamics had a major impact on rental markets in the immediate aftermath of the pandemic. Now, while the reversion process will be more gradual, a re-anchoring appears underway.