The U.S. rental market to gain in importance as the for-sale market remains challenging

Affordability challenges and increased flexibility will likely remain dominant trends in 2024

For agents, staying informed about these developments is essential for strategic decision-making and client guidance in the coming year and beyond. Plus, seeking the most efficient tools to service this segment and help create income while the for-sale market remains challenged and provides less opportunities. Continuously elevated mortgage rates coupled with inflated property prices have created a sort of stagnation in the for-sale segment. Around 49% of agents sold either zero homes or only one in the past year, according to a recent study by the Consumer Federation of America.

While the single-family home market remains rather stagnant, the U.S. rental segment has been quite fluid. Following a surge in rents during 2021 and early 2022, the sector experienced a notable cooling trend in rates last year, according to data by Apartment List. This development is crucial for agents, as it brings not just relief to tenants nationwide but also might create more movement as renters are looking for better deals. Year-over-year rent growth dipping by about 1% is a departure from the earlier upward trajectory. Notably, this downward trend marks a first since the early days of the global pandemic.

The decline in rents is not solely tied to economic factors but is also influenced by supply and demand dynamics. Higher housing costs, inflation concerns and economic uncertainties have led to stagnating household formations, contributing to the market’s deceleration. Simultaneously, a historic boom in multifamily construction has increased the supply side, resulting in a national vacancy index hovering around 6.4% — slightly higher than the 2019 average.

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Renting Is Cheaper Than Owning in Nearly 90% of Local Markets

Despite rents growing faster than home prices, the trend of renting being more affordable than owning continues.

While both renting and owning a three-bedroom home continues to pose significant financial burdens taking up more than one-third of wages for average workers, median rental rates still require a smaller portion of average wages than major homeownership expenses on three-bedroom properties in 296 (88%) of the 338 U.S. counties with enough data to analyze.

A trend established before 2023, the gap in renting versus owning remains even as rents have risen faster than home prices over the past year, according to ATTOM.

"Finding an affordable home remains a daunting prospect around the country for average workers, regardless of whether they want to buy or rent. Continuously increasing home prices contribute to the escalation of rental costs, making both buying and renting properties a challenging endeavor across most of the United States," says Rob Barber, CEO at ATTOM. "But the latest data shows that even as rents are growing faster, they remain more affordable than owning."

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RealPage: Apartment Supply Surges to Highest Levels in Decades

Sun Belt and Mountain regions lead in new multifamily construction.

According to RealPage, nearly 440,000 multifamily units were completed last year, with even more—671,000 units—scheduled to deliver in 2024. However, completions are expected to dramatically decline after this year due to the recent slowdown in starts attributed to higher financing costs and softer fundamentals.

“High supply is great news for renters and a hurdle for investors,” said RealPage chief economist Jay Parsons. “Renters suddenly have far more options than they’ve had in recent years, and that’s putting downward pressure on rent growth.”



Rents flattened last year, inching up 0.3%, but apartment demand rebounded after a sluggish 2022. The fourth quarter, which typically is a seasonally slow leasing period, was a surprise bright spot, according to RealPage.

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