Apartment rents are stagnating, but multifamily construction is booming, creating a widening split in the U.S. housing market. According to a new Redfin report, renter households rose by 2.7% in Q3 to 45.6 million—a growth rate nearly three times that of homeownership. This gain, which represents 1.18 million new renter households, marks the second fastest uptick since 2015, as sky-high homebuying costs have kept renting as a more affordable option.

While the median asking rent in September was just 0.6% higher than last year, home prices climbed 6% year-over-year and are up more than 10% since 2022. Home sales are also dragging, with only 2.5% of the nation's homes changing hands in the first eight months of 2024, marking the lowest rate in decades. Meanwhile, apartment completions surged, with 647,000 new units hitting the market so far this year, the highest count since 1994.

"With home prices at record highs and mortgage rates still elevated, renting is increasingly the only viable option for many young people and families," said Redfin senior economist Sheharyar Bokhari. "Building more homes is part of the solution, but we also need to recognize that Gen Z and future generations may not see homeownership as a primary goal, which could keep the rentership rate high for years."