SEATTLE, WA — The latest report from Redfin reveals a significant increase in renter households across the United States, with a year-over-year rise of 2.7% in the third quarter, bringing the total to a record 45.6 million. This growth rate is notably three times faster than the 0.9% increase in homeowner households, which reached 86.9 million.
The surge, adding approximately 1.18 million renter households, marks the second fastest growth pace since 2015, only surpassed by a 2.8% increase in the first quarter. Economic factors such as rising home prices, which climbed 6% year-over-year in September, have contributed to this trend. Meanwhile, the median asking rent increased by just 0.6% over the same period, becoming more affordable as wages have grown at a rate of around 4%.
Redfin Senior Economist Sheharyar Bokhari highlighted the challenges prospective homeowners face, stating, “Affordable housing has been at the forefront of this election cycle because so many people are struggling to see how they will ever become homeowners—especially those from younger generations.” He added, “With home prices at record highs and mortgage rates remaining elevated, renting is increasingly the only viable choice for many young people and families.”
The boom in multifamily construction over the past two years has also played a role in stabilizing rents, with new units being added at an annual rate of 647,000—the fastest pace since records began in 1994. However, the issuance of permits for these developments saw a decline of 16% year-over-year in September, indicating a slowdown from the post-pandemic peak in February 2023.
Rentership is highest in expensive markets such as San Jose, CA, where 52% of households rent, followed by Los Angeles, New York, San Diego, and Fresno. Conversely, areas where buying has traditionally been more affordable, like Cape Coral, FL, and Charleston, SC, show lower rentership rates.
As the housing market evolves, Bokhari suggests that the trend towards renting may continue, noting that “Gen Z and future generations may not view homeownership as a life goal.” This shift reflects broader economic realities and societal changes impacting housing preferences across the nation.
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