The number of renter households in the United States increased by 1.9% year-over-year in the second quarter, reaching a record 45.2 million, according to a new report from Redfin. This growth rate is more than three times that of homeowner households, which grew by only 0.6% to a record 86.3 million.
The data, sourced from a Redfin analysis of U.S. Census Bureau records dating back to 1994, indicates that the growth in renter households is the second-fastest since 2021, while the growth in homeowner households is the slowest since 2019. Notably, the number of renter households saw its largest gain since 2015, with a 2.8% increase in the first quarter of 2024.
The U.S. population is at a record high, contributing to the rise in both renter and homeowner households. However, the surge in renter households is partly attributed to the rising costs of homebuying, which have increased significantly faster than rents.
In June, the median multi-family dwelling asking rent increased by less than 1% year-over-year, whereas the median monthly mortgage payment rose by approximately 5%. Compared to pre-pandemic levels in June 2019, asking rents were 23% higher, while mortgage payments soared by 90%. This spike in mortgage payments is driven by record-high home prices and mortgage rates that, despite being below their recent peak, remain more than double the all-time low reached during the pandemic.
“The cost of both renting and buying a home has skyrocketed in recent years, but the affordability crunch isn’t quite as severe in the rental market. That’s because America has been building a lot of apartments to keep pace with robust demand from renters,” said Sheharyar Bokhari, Redfin’s Senior Economist. “The country’s leaders should heed this lesson when considering how to improve affordability in the homebuying market: When there’s more housing to go around, prices don’t increase as fast.”
While rents are not increasing as rapidly as homebuying costs, finding affordable housing remains a challenge for many renters. June’s median U.S. asking rent of $1,654 was the highest since October 2022 and just $46 below the all-time high. Nearly two in five renters doubt they will ever own a home.
Renters may find some relief in Austin, Texas, and parts of Florida, where rents are falling. However, Florida’s intensifying risk from natural disasters and an insurance crisis complicates the situation.
America’s Multifamily Building Boom May Be Slowing
Over the past year, the U.S. has added 855,000 renter households and ramped up construction to meet the rising demand, helping to curb rent growth. The country is adding new multifamily housing units at an annual rate of 563,000, the second-fastest pace on record. The fastest pace was in the first quarter of 2024.
Despite these efforts, the U.S. still faces a housing shortage. Multifamily building completions are at historic highs as projects started during the pandemic housing boom are now being finished. However, the slowdown in multifamily building permits and starts could cause asking rents to rise again in the coming years.
Los Angeles Leads U.S. Metros in Rentership
Nationally, 34.4% of U.S. households are renter households, a figure that has remained relatively stable. Coastal metros, where buying a home is particularly expensive, have much higher rentership rates.
Los Angeles tops the list with 53% of households renting, followed by San Diego (52.4%), New York (50.1%), Fresno, California (49%), and Austin, Texas (46.3%). Fresno is an outlier in this group due to its lower housing costs compared to other cities, but the high poverty rate in Fresno County makes homeownership challenging for many residents.
Conversely, areas where homeownership is more affordable have lower rentership rates. Worcester, Massachusetts, has the lowest share of renter households among the 75 largest U.S. metropolitan areas at 23.2%, followed by North Port, Florida (23.3%), Albany, New York (25.6%), Rochester, New York (25.7%), and Syracuse, New York (26.2%).
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