The number of rental households has surged at three times the rate of homeowners in the third quarter of this year, maintaining a trend that has been ongoing for almost a year due to rising affordability concerns. A report from Redfin revealed that renter households increased by 2.7% year-over-year during the September quarter, reaching a record 45.6 million.

In contrast, the homeowner household count showed a modest growth of 0.9%, also reaching a record high of 86.9 million. This growth in renter households represents the second-fastest increase since 2015, falling just behind the 2.8% growth rate noted in the first quarter of 2024. "With home prices at record highs and mortgage rates remaining elevated, renting is increasingly the only viable choice for many young people and families," commented Sheharyar Bokhari, Senior Economist at Redfin. Home prices have risen by 6% year-over-year as of September, with affordability continuing to be impacted by high mortgage rates.

The asking rent also saw a rise of 0.6% annually in September, remaining largely stagnant for the past two years as per Redfin’s findings. Bokhari further noted, "Gen Z and future generations may not view homeownership as a life goal, and the rentership rate may continue to rise for years to come." Stability in rental prices can be attributed to a significant influx of new multi-family units entering the market, following a building boom that commenced during the COVID-19 pandemic.

New multifamily housing units are expected to reach an annual rate of 647,000 through the third quarter, marking the highest level since records began in 1994. Despite the Federal Reserve's decision to cut interest rates by 50 basis points in September, Chen Zhao, the Economic Research Lead at Redfin, remarked last week that it was "surprising" to see mortgage rates return to 7%.

Nevertheless, pending home sales have risen by 4.5% year-over-year during the four weeks ending October 27..