Americans Choosing Renting Over Home Buying

DALLAS – (By Dale King, Realty News Report) – Demand for apartments is reaching near-record highs as the cost of buying a house is out of reach for many households, according to a new CBRE report.

“For many Americans, renting is the most financially viable and flexible housing option,” said Matt Vance, Americas Head of Multifamily Research for CBRE.

Reducing the gap between homeownership and renting will require a combination of lower home prices and interest rates, higher average incomes and strong rent growth, he said. It may take years for home buying to be affordable again.

“In the meantime, we expect elevated multifamily occupancy rates to persist as the rental market continues to meet the demand for housing,” Vance said.

Key Findings from CBRE Rent vs Buy Study:

The percentage of renter households across the U.S. able to afford the median-priced homes in their market has decreased to just 12.7 percent today from 17.0 percent in 2019.
In some markets, the monthly cost of buying the median-priced home is even more pronounced, exceeding 200 percent more than the average rent.
The overall multifamily vacancy rate fell to 4.1 percent in Q2, as demand continued to outpace new deliveries.
Average year-over-year effective rent growth increased to 1.2 percent in Q2, the first time in two years that rent growth exceeded 1 percent.
Net absorption increased by 47 percent year-over-year to 188,200 apartment units, the highest second quarter absorption on record and 44 percent above the pre-pandemic Q2 average.
All 69 markets tracked by CBRE recorded positive net absorption in the second quarter.
Construction completions held steady at 83,000 apartment units in Q2, with fewer apartment complexes being closed in the coming quarters.

CBRE Group, the world’s largest commercial real estate services and investment firm, says the number of households being priced out of home buying is astronomical.

“High mortgage rates and elevated home prices have pushed homeownership further out of reach for an additional 1.8 million U.S. renter households,” states CBRE. “A growing affordability gap means these households can no longer afford a median-priced home in their market, a trend that has accelerated over the past five-and-a-half years. Rising unaffordability is a key reason why existing renters are opting to stay put, leading to high occupancy rates in multifamily properties.”

Down Payments are a Huge Hurdle to Home Buyers

In its analysis, CBRE found that “a 20 percent down payment on a median-priced house now equals four years of average apartment rent.” In high-cost markets like Orange County, Calif., that time period can surge to eight years or more.

CBRE predicts multifamily occupancy rates will remain above historical averages for years to come. “This ongoing supply-demand imbalance is expected to support near-term rent growth, underscoring the critical role the multifamily sector plays in addressing the nation’s housing needs.”

Rent or buy? The money gap widens

While home prices have stabilized or even declined slightly in some U.S. markets, home purchases still remain beyond the economic grasp of many households. Nationally, the average cost of owning a home is $4,643 per month — more than double the average monthly rent of $2,228. This equates to a 108 percent premium for owning a residence compared to renting. This is down from a peak premium of 128 percent in late 2023, but it remains well above the pre-pandemic average of 68 percent.

The CBRE report says much of the drop in affordability can also be gauged by the increased premium needed to make a monthly mortgage payment vs. the average monthly rent expense. Orange County saw its premium nearly double to 303 percent in Q2 2025 from 160 percent in 2019. Premiums in Austin and Los Angeles also jumped significantly while some markets such as San Francisco and Chicago changed very little since 2019.

Markets most affected

In its analysis of 69 markets, CBRE found the affordability gap was most pronounced in major metros like Boston and Washington, D.C., Los Angeles and Philadelphia, which have seen the largest increases in renter households priced out of homeownership.

Other major cities, including fast-growing Sun Belt communities like Tampa, Austin, Phoenix, Orlando and Atlanta that drew hoards of folks during the pandemic have also seen sharp affordability declines due to rising home prices and population growth.

The report notes that markets with the biggest reductions in the percentage of renter households that can still afford homeownership include Tampa (-10.1 percent), Washington, D.C. (-9.0) and Austin (-8.3). Areas such as Denver, New York and Chicago saw very small reductions in the percentage of renter households that can still afford a home – the result of higher incomes and relatively stable or slightly declining home prices.

Markets with an already low percentage of renter households that can pay the freight for homeownership had little room for further declines.

Mark Your Calendar

Minnette Boesel, a Houston preservation leader, will speak on the revival of Downtown’s Market Square area at the Heritage Society’s Speaker Series and Wine Reception on Tuesday, October 7, at 6 p.m., at 1100 Bagby Street. For information: click here.

Central Houston will present the State of Downtown 2025 on Oct. 30 from Noon to 1:30 p.m. Some 1,000 business and community leaders will focus on progress in the heart of the city. NBC Sports soccer analyst Tim Howard, a Hall of Fame goalkeeper, will deliver remarks as Houston prepares to host the 2026 Fifa World Cup Games. The State of Downtown event will be held at the 713 Music Hall at the historic POST Houston, 411 Franklin St. For information: click here.

CommGate will host its Economic Outlook –Wednesday, Oct. 15 from 3 to 6 p.m. at the Houston Country Club. Economist Ted C. Jones, PhD, will present an economic forecast examining trends that will shape the real estate market in the coming year. Following the presentation, connect at a networking social with beverages and hors d’oeuvres. Free for members of CommGate, CCIM, and SIOR. Non-members $50. For information: click here.

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