The rental sector is becoming a more significant part of the housing market ecosystem, with these types of households growing 1.9% last year, more than double the growth of homeowners (0.7%), according to research by Arbor Realty Trust and Chandan Economics.
The rental market – including both multifamily and single-family rentals (SFR) – has consistently risen over the past 15 years and grew at a faster pace last year than any other year since 2015, excluding the 2021 pandemic-driven housing bounce back.
Roughly 848,000 rental households were added across the country in 2024, according to an analysis of U.S. Census Bureau data. That pushed the total to a new high of 45.3 million, which accounted for more than half of all U.S. household growth in 2024.
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“While the homeownership rate has been more variable in recent years, the annual growth rate of renter-occupied housing units has increased every year since 2009, except for two: 2017 and 2020,” said the report. “As a result, rentals have become an outsized contributor to total household growth. Despite comprising only about three in 10 U.S. households (34.1%), rentals accounted for a majority (54.5%) of all household growth last year.“
The rental market has been bolstered by increased supply, shifting household preferences and homeownership affordability challenges, the report said. Last year, builders completed roughly 591,600 multifamily units nationally, the highest amount in five decades. In addition, single-family BTR construction is at historic levels, and those who are choosing to rent rather than own are showing a willingness to pay more for an optimized living experience, even if that means delaying ownership, said the report.
About a third of renters cite relocation flexibility as a top reason for avoiding home ownership. This trend is being fueled by highly educated young Americans and a growing cohort of renters over 50 years old, according to the report.
Meanwhile, increased economic uncertainty continues to drive a preference for flexibility at a time when high mortgage interest rates and record home prices are keeping potential home buyers on the sidelines. Home purchase sentiment increased from 2023 to 2025, but only 20% of consumers believe now is a good time to buy a home, according to Fannie Mae data.
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Kristen Smithberg
Kristen Smithberg is a Colorado-based freelance writer who covers commercial real estate, insurance, benefits and retirement topics for BenefitsPRO and other industry publications.
