The Forces Driving Long-Term Rental Housing Demand

Written By Marc Nicholson

Demographic Trends and Housing Costs Sustain Rental Demand​

Millennials Are Reshaping Rental Housing Demand​

  • There are 73 million millennials, now in their late 20s to early 40s, that are coming into key life stages like marriage and family formation​

  • Apartment lease renewal rates have climbed to 55% as fewer renters move into homeownership​

  • Enhanced amenities, modern designs, and better services have made rental housing more attractive​

Affordability Challenges Are Reshaping Housing Decisions​

  • Home prices have surged, rising 6.1% in the past year and nearly 50% since early 2020​

  • The monthly cost of owning a median-priced home is about $3,100, compared to $1,830 for an apartment​

  • The median first-time homebuyer age has risen from 30 in 2010 to 38 in 2024​

Limited Housing Supply Keeps Pressure on Rentals​

  • New single-family home construction remains low, keeping home prices elevated​

  • Mortgage rates show no signs of significant declines, reinforcing the affordability gap​

  • With fewer homes being built, rental vacancy rates could tighten, supporting rent growth​

As of 2024
Sources: Marcus & Millichap Research Services, U.S. Census Bureau, National Association of Realtors​

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Marc Nicholson
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