Apartment tenants with pending renewals are beginning to opting for short-term or month-to-month leases rather than long-term leases, according to the latest survey from the National Apartment Association, which found that nearly 35% of landlords said that some portion of tenants renewing leases signing short-term lease structures. The previous monthly report—this latest survey was conducted from July 20 through July 24—did not address short-term lease structure, however, the data notes that tenants' preference for short-term leases has been increasing since March.

Tenant preferences are clearly changing, and the trend toward short-term lease terms could only be the beginning. Apartment owners are beginning to lose confidence in the market, the survey also found, a development that is appears to be accelerating. In the most recent survey, 23% of multifamily owners and operators anticipate that it will take one-to-two years for operating metrics to recover and return to pre-pandemic levels. In April, only 17% of survey respondents made the same claim. Most owners continue to believe that the market will recover in the next 12 months, but the numbers appear to be shifting to a longer recovery timeline.

At the same time, operating expenses have increased during the recession. Almost half of apartment owners and operators have experienced a marginal increase in operating expenses and an additional 11% have experienced a significant increase in operating expenses. These operating expenses are difficult for landlords to absorb with rent prices declining and rent collections struggling. Freddie Mac Multifamily's 2020 Midyear Report expects a decline in gross income growth of 3.3% to 4.2% for the year, and the National Multifamily Housing Council's Rent Payment Tracker shows that rent collections in September are down 2.4% through the mid-month compared to the same time in August.