The Housing Shift: Renting as the New Norm in America’s Metros

In the country’s most economically dynamic urban centers, a quiet but powerful transformation is underway. Renters now outnumber homeowners, and the real estate industry is struggling to keep up.

What was once a transitional phase of life is becoming a permanent state for millions of those living in the U.S. This is reshaping the fabric of city housing markets and calling into question the industry’s long-standing focus on ownership.

Nationally, renters make up about 35 percent of all occupied housing units. In metro areas that serve as economic, cultural and tech hubs, that figure climbs dramatically, according to national data and an analysis by RentSpree Academy. In Manhattan, more than 75 percent of residents are renters. Miami stands at 69 percent, while Boston, Los Angeles and San Francisco each surpass 60 percent. Even in fast-growing cities like Austin and Chicago, renters are now in the majority.

This is not a short-term reaction to pandemic-era volatility. It is a long-term structural shift. Between 2006 and 2016, 97 of the 100 largest U.S. cities saw increases in the share of renter households, according to the Urban Institute. Harvard’s Joint Center for Housing Studies confirms the trend has remained elevated through 2023, with renter households nationwide topping 44 million.

In many of these metros, renting is no longer just an alternative to buying. It is the standard.

Renter growth outpaces ownership
This shift is underpinned by both macroeconomic and demographic realities. Following the 2008 housing crisis, tighter mortgage lending, stagnant wage growth and student debt made homeownership harder to achieve, particularly for younger households. 

Millennials and Gen Z, now the dominant cohorts in many urban job markets, are delaying buying. They are opting instead for rental lifestyles that offer flexibility and proximity to employment and amenities.

Affordability also plays a central role. Median home prices in cities like San Francisco and New York have far outpaced income growth, pushing ownership further out of reach. Even as rents have risen sharply in the last few years, renting still remains more accessible than buying in many metros. Combined with high interest rates and limited inventory, renting has become the default rather than the fallback.

Real estate infrastructure still lags behind
Despite these clear market signals, much of the real estate infrastructure remains calibrated to the for-sale market. Broker networks and listing platforms, for example, are still largely focused on ownership. Tools for rental transactions, leasing workflows and long-term renter engagement are often underdeveloped or treated as peripheral.

But the rental market is not a seasonal or secondary sector. Rental activity in high-renter cities is constant and competitive, with high turnover and mobility rates. Census data shows renters move more frequently than owners, creating consistent demand for listings, tenant screening, lease processing, and property management services. This year-round churn represents both a challenge and a growth opportunity.

This evolving dynamic has already spurred innovation in build-to-rent communities and multifamily developments tailored to long-term renters. Investors and developers increasingly recognize the value of stable, cash-flowing rental properties in cities where homeownership is unattainable for much of the population.

A tipping point for the industry
The rise of renter-majority cities signals a long-term realignment in housing in the U.S. As affordability pressures persist and generational preferences evolve, the rental market is poised to remain the central engine of housing activity in urban areas.

Real estate stakeholders who adapt by modernizing systems, investing in rental-centric tools and viewing renters as long-term participants in the market will be best positioned for sustainable growth. Those who continue to treat rentals as an afterthought will risk falling behind in a housing economy that looks very different from the one they built their playbooks around.

Michael Lucarelli is the CEO and co-founder of RentSpree.