Long-Term Renting Is Reshaping U.S. Housing: Affordability, Investors and the New Normal

Affordability squeeze and the rise of long-term renting

The story of U.S. housing in the mid‑2020s is increasingly a story of long-term renting. High home prices, elevated mortgage rates and stubborn inflation have made the transition from renting to owning slower and more difficult for many households.

An analysis in Scotsman Guide, drawing on Census and Point2Homes data, finds that the United States has added nearly 10.5 million renter households since 2000, bringing the 2024 rentership rate to roughly 34.7%—only modestly above its level at the turn of the century.[scotsmanguide.com][point2homes.com] The homeownership rate peaked at 67.3% in 2006, fell in the aftermath of the mid‑2000s housing bust, and stood around 65.3% in 2024.[point2homes.com] In other words, ownership is still common, but a growing slice of the population is spending more of their adult lives as renters.

Affordability pressures are a key driver. The Scotsman Guide piece notes that rentership has headed back up in recent years as affordability worsened, sidelining first‑time buyers even as overall homeownership stays above 60%.[point2homes.com] Many households who might once have bought a starter home in their late 20s or early 30s are now renting well into midlife, waiting for a better combination of prices, incomes and borrowing costs.

Where renter households are growing fastest

The move toward long-term renting is not evenly distributed. Certain regions have seen dramatic gains in renter households and rentership rates.

Point2Homes data, summarized by Scotsman Guide, shows that more than one‑third of the nearly 30% increase in rental household growth since 2000 came from just three states: California, Texas and Florida, which together added about 3.8 million renter households.[point2homes.com] At the same time, Nevada, Texas and North Dakota have each seen rentership growth of more than 50% since 2000.[point2homes.com]

At the city level, 43 cities have shifted to “renter‑majority” status over the past 25 years, compared with just 18 that became “owner‑majority.”[point2homes.com] In many metros, especially those with strong job growth and limited new construction, renting is no longer just a transitional phase on the way to ownership; it’s the dominant way people live.

States with the highest rentership shares in 2024 include New York, California, Nevada, North Dakota, Hawaii, Texas, Massachusetts, Washington and Oregon, all with roughly 37% or more of households renting.[point2homes.com] These patterns underscore how both high-cost coastal markets and fast‑growing interior states are converging toward a similar reality: more households renting for longer.

Investors, single-family rentals and the new demand story

Rising rentership has not gone unnoticed by investors. As more households rent, demand for rental units—especially single-family homes with yards—has strengthened.

Scotsman Guide reports that expanding demand from renter households helped fuel a surge in single-family residential investor lending starting during the pandemic, when low borrowing costs and rapid price appreciation made real estate especially attractive.[point2homes.com] Even after a historic slowdown in home sales following interest‑rate hikes in 2022, investors have remained relatively active. In the first half of 2025, they bought about 85,000 homes per month, slightly more than in the same period of 2024, even though total purchase volumes were still about 25% below 2021 levels.[point2homes.com]

One consequence is that nearly one‑fifth of all U.S. single-family homes are now owned by real estate investors.[point2homes.com] In lower price tiers, that can crowd out first‑time buyers who are competing with cash offers or financing structures tailored for investors. At the same time, investor ownership can expand the supply of professionally managed rentals, particularly single‑family rentals that appeal to families who want more space but can’t or don’t want to buy.

Financing tools have evolved with this shift. Debt‑service coverage ratio (DSCR) loans—which qualify properties based on rental cash flow rather than the borrower’s personal income—have become a popular way to build rental portfolios.[point2homes.com] With expectations for relatively modest national home price gains in the next few years, the engine of returns is tilting away from rapid appreciation and toward steady rental income.

How a stalled purchase market is reshaping Main Street

Long-term renting also changes how money flows through local economies. With fewer people buying homes and more people staying put in rentals, certain retail sectors are adapting.

Reporting from Globest describes how a stalled housing market is keeping a particular retail niche—furniture, appliances and home‑improvement stores—surprisingly resilient.[globest.com] Even as transaction volumes sag, these retailers benefit when renters choose to upgrade their current living spaces instead of moving. A household that postpones buying may still invest in a better sofa, new mattress or energy‑efficient appliances to improve day‑to‑day life in a rental.

This pattern matters for investors and property owners as well. Well‑furnished and updated rentals can command stronger demand and support longer tenancies, which in turn stabilize cash flow. For local businesses, a high‑rentership neighborhood can support steady, recurring sales tied to ongoing household formation and turnover within rental stock, even when home sales are weak.

Small landlords, ‘stability premiums’ and renter experiences

Not all investors are playing the same game. While some large owners focus on maximizing rent growth, smaller investors are increasingly prioritizing stability.

WebProNews highlights what it calls a “stability premium”: many small-scale landlords are deliberately setting rents slightly below prevailing market levels to reduce turnover, avoid long vacancies and build stronger relationships with tenants.[webpronews.com][webpronews.com] Rather than chasing every last dollar, they are trading a bit of top‑line revenue for lower risk and more predictable long‑run returns.

Lower turnover also means fewer make‑ready costs and less time spent marketing units, screening applicants and managing move‑ins and move‑outs. For tenants, this can translate into more stable rent paths, fewer sudden hikes and longer relationships with a single housing provider. In a world where households may rent for a decade or more, that kind of predictability carries real value.

Practical takeaways for renters, buyers and small investors

For renters, the data suggests planning as if you may be renting longer than prior generations. That can mean:

• Budgeting for periodic rent increases and saving for deposits or moving costs even if you intend to stay put.
• Prioritizing neighborhoods and landlords that value long-term tenants, including smaller owners willing to trade a bit of rent for stability.
• Treating your rental like a semi‑permanent home—investing in furnishings, organization and small improvements that are portable or reversible.

For aspiring buyers, understanding that long-term renting is now common can help reset expectations. Rather than viewing renting as “throwing money away,” it may be more useful to treat it as an intentional phase while you shore up your finances, pay down other debts and wait for a more favorable combination of prices and borrowing costs.

For small investors, the rise of long-term renting presents both opportunity and responsibility. Structuring portfolios around realistic rent growth, conservative leverage and tenant stability—rather than aggressive short‑term appreciation—may align better with the direction of the market. Tools like DSCR loans and professional property management can help, but so can simple strategies like offering renewal incentives and keeping rents just under the going rate when you have great tenants.[point2homes.com][webpronews.com]

Long-term renting is no longer a marginal feature of the U.S. housing landscape. It is becoming a defining characteristic. Households, investors and local businesses that recognize and adapt to this new normal are likely to be better positioned, whether the next few years bring slower growth, renewed price gains or something in between.