Renter Population Is Growing 3X Faster Than Homeowner Population

The number of US renter households in the second quarter grew 1.9% year-over-year, according to a new data report from Redfin (NASDAQ:RDFN). The renter growth is more than three times faster than the number of homeowner households, which grew 0.6% in the second quarter to a record 86.3 million.

Growth in the number of renter households hit a peak of 2.8% in the first quarter of 2024, which marked the largest gain since 2015. Renter households have formed faster than homeowner households for three straight quarters, partly due to elevated homebuying costs compared to rental housing – the median apartment asking rent increased less than 1% year-over-year in June while the median monthly mortgage payment jumped roughly 5%.

Nationwide, just over one-third (34.4%) of households are in rental housing. Los Angeles has a rentership rate of 53%, the highest among the 75 largest metropolitan areas. Other metros with large percentage of renters include San Diego (52.4%) New York (50.1%), Fresno, CA (49%) and Austin (46.3%).

“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 Redfin Senior Economist Sheharyar Bokhari. “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.”