For generations, buying a home was considered one of the biggest milestones of adulthood. But for many Americans today, that goal is becoming harder to reach. Between rising home prices, mortgage payments, and the additional costs of homeownership, more people are taking a closer look at renting and deciding it makes more sense for their lifestyle and finances.
This shift is creating an opportunity for multifamily real estate owners and investors. As renting becomes a longer-term housing choice rather than simply a temporary stop before buying a home, well-positioned apartment communities could benefit from a growing and more diverse pool of renters.
So, are more people renting instead of buying? And what could that mean for owners of Class A multifamily communities and investors looking to gain exposure to multifamily real estate? Let’s take a closer look.
Why More Americans Are Choosing to Rent Instead of Buy
Not everyone who rents is in the same situation. Some people rent because buying a home is simply too expensive right now. Others enjoy the flexibility, convenience, and fewer responsibilities that come with apartment living.
1. Buying a Home Has Become More Expensive
Between home prices, mortgage rates, property taxes, homeowners insurance, and maintenance expenses, the cost of owning a home can add up quickly. And even people who have steady incomes may find it difficult to save enough for a down payment while keeping up with everyday expenses.
According to the Federal Reserve’s Economic Well-Being of U.S. Households in 2024 report, just over two-thirds of renters said they rented because they couldn’t afford a down payment. Nearly half (49%) said they couldn’t afford the monthly mortgage payment, while 42% said they couldn’t qualify for a mortgage.
These aren’t just temporary concerns, either—the share of renters citing affordability as their main reason for renting has steadily grown over the past several years.
According to Realtor.com’s July 2026 Rental Report, buying a starter home across the 50 largest U.S. metropolitan areas costs an average of $858 (50.6%) more per month than renting.
In some markets, the gap was even larger. In Austin, Texas, buying a starter home cost approximately $1,917 more per month than renting, while the difference In Dallas-Fort Worth was $1,194.
For someone trying to save money, build financial stability, or avoid taking on a large monthly payment, renting can be the more comfortable option.
2. Renting Offers More Flexibility and Fewer Responsibilities
Not everyone who rents is waiting until they can afford to buy a home. Some people simply prefer renting.
Think about all the responsibilities that come with owning a home: yard work, routine maintenance, major repairs, and unexpected expenses that always seem to pop up at the worst possible time.
With apartment living, many of those responsibilities fall to the property owner or management team. Need something repaired? Simply submit a maintenance request. Want access to a fitness center, swimming pool, or clubhouse? Those amenities may already be included in the community.
Renting also offers more flexibility. People who may relocate for work, want to live closer to restaurants and shopping, or aren’t ready to settle down in one location may appreciate having a lease rather than committing to a long-term mortgage.
The Federal Reserve found that 58% of renters considered renting more convenient or flexible than owning a home. Additionally, 47% viewed renting as less financially risky.
For many households, renting is simply a lifestyle preference.
3. More Higher-Income Households Are Renting, Too
Another interesting trend is that rental demand isn’t coming exclusively from people who can’t afford to buy a home.
Harvard University’s America’s Rental Housing 2026 report found that the number of renter households earning at least $75,000 annually increased by 1.7 million between 2021 and 2024. In fact, higher-income earners accounted for much of the overall renter growth during that period.
Why does this matter? Because it challenges the idea that apartment communities primarily serve people looking for the least expensive housing option.
Many renters have the financial ability to pay for a higher-quality living experience. They may simply prefer the convenience of apartment living, a desirable location, or access to amenities without the responsibilities of homeownership.
This creates an opportunity for communities that offer more than just a place to sleep.
4. Household Formation Is Creating More Demand for Housing
Another reason rental demand matters is household formation. As people move out on their own, relocate for work, or go through major life changes, they need a place to live.
According to the National Association of REALTORS®, the U.S. added approximately 1.4 million households in 2024. Of those, roughly 463,000 were renter households.
Changing living arrangements are also playing a role. The U.S. Census Bureau reported that nearly 40 million U.S. households consisted of one person in 2025, accounting for 29% of all U.S. households, compared with just 20% in 1975.
For multifamily owners and investors, more renter households mean a larger pool of potential residents. Many are looking for a place of their own without the costs and responsibilities of homeownership.
What This Means for Class A Multifamily Owners and Investors
If more households are choosing to rent, and higher-income households are becoming a larger part of the renter population, demand for well-maintained, well-located apartment communities could remain an important part of the housing market.
1. Class A Apartments Are Attracting More Renters
Class A apartment communities go beyond the basics. Many provide features such as modern floor plans, updated interiors, attached garages, fitness centers, saltwater swimming pools, dog parks, walking trails, and convenient access to shopping, restaurants, and employment centers.
There’s also research supporting the strength of higher-quality apartment demand.
The Harvard report found that Class A apartment rents increased 1.3% year over year in the fourth quarter of 2025. By comparison, Class B rents declined 0.6%, while Class C rents declined 2.7%. The study attributed the stronger Class A performance to demand from higher-income households.
This doesn’t mean every Class A property will outperform its competitors. Location, pricing, property condition, and nearby competition still matter. But it does suggest that renters continue to place value on quality, and that well-positioned communities can have an advantage.
Attracting residents willing to pay for a higher-quality living experience can help owners keep properties full and support steady rental income.
2. Longer-Term Renters Create a Broader Pool of Potential Residents
When the cost of homeownership goes up, some potential buyers may decide to rent longer than they originally planned. And that can mean more people looking for a place to rent.
Think about someone who is financially comfortable but isn’t quite ready to take on a $2,500 monthly mortgage, deal with unexpected home repairs, or put a large amount of money toward a down payment. A well-appointed apartment community can offer an appealing alternative without some of those added costs and responsibilities.
And it’s not just younger renters making that choice. People at different stages of life, from working professionals and growing families to empty nesters and retirees, may all have their own reasons for choosing apartment living.
For multifamily owners and investors, that creates an opportunity. A property that appeals to a range of renter demographics can attract a broader pool of potential residents than one designed with just a single age group or stage of life in mind.
3. Strong Rental Demand Can Support Long-Term Property Performance
Apartment communities still have to compete for residents, collect rent, and manage expenses. Strong rental demand can help owners maintain occupancy and grow rental income, but it doesn’t guarantee better performance.
New apartment construction, local job growth, population trends, and nearby competition all play a role. That’s why investors need to look beyond rental demand and understand what’s happening in the market.
Texas, North Carolina, Tennessee, and Florida saw strong growth in renter households over the past decade. These states also added significant numbers of higher-rent apartment units.
While population growth and rental demand matter, investors also need to consider local job opportunities, affordability, and how many new apartments are being built.
4. Slowing Apartment Construction Could Ease Supply Pressures
Another factor multifamily investors should watch is how many new apartments are being built in a market.
After several years of heavy construction, particularly across parts of the Sun Belt, apartment development is beginning to slow.
According to Cushman & Wakefield’s Q3 2026 Multifamily MarketBeat, approximately 250,000 apartment units were delivered during the first three quarters of 2026, down 25% from the same period in 2025. The number of apartments under construction has also declined, pointing to fewer new units entering the market in the years ahead.
For multifamily owners and investors, less new construction could mean less competition for existing communities over time. However, conditions vary by market, and areas with a large number of recently completed apartments may still face challenges attracting residents.
What This Means for Multifamily Investors
The growing number of people choosing to rent is creating new opportunities for multifamily real estate investors.
People will always need a place to live. And as homeownership becomes less affordable or less appealing, professionally managed apartment communities can play an increasingly important role.
But growing rental demand doesn’t mean every apartment building is a good investment. At BAM Capital, we believe successful multifamily investing starts with being selective.
Before pursuing an acquisition, we evaluate the market, competition, population trends, employment opportunities, and future apartment development. We also look closely at the property’s condition, current rents, operating expenses, and purchase price.
For example, even an attractive Class A community in a growing market can be a poor investment if it’s purchased at the wrong price or faces too much incoming competition.
On the other hand, acquiring a well-positioned property below comparable sales, estimated replacement cost, and its prior purchase price can establish a favorable cost basis—though, as with any real estate investment, execution and market risks still apply.
We also place a strong emphasis on operations. Our vertically integrated approach brings acquisitions, property management, asset management, and construction together under one roof. This allows our teams to stay involved throughout the investment, from evaluating a property to overseeing its performance after acquisition.
Our goal is to acquire quality properties in markets with strong fundamentals, at attractive prices, and manage them with a long-term strategy in mind.
Is the Future of Housing More Rental-Focused?
For many households, renting offers flexibility, convenience, fewer maintenance responsibilities, and access to amenities without the financial commitment of buying a home.
As more households choose to rent for financial and lifestyle reasons, well-located, professionally managed apartment communities could continue to play an important role in the housing market.
At BAM Capital, we see opportunity in understanding these trends, identifying markets with strong fundamentals, and being selective about the properties we acquire.
Interested in learning more about multifamily investing and BAM Capital’s approach to acquiring apartment communities? If you are an accredited investor, schedule a call with our team to discuss our investment strategy and current opportunities.
Disclaimer: This content is for informational purposes only and is not financial, tax, legal, or investment advice, nor an offer or solicitation to buy or sell securities. Investment opportunities offered by BAM Capital and its affiliates are made pursuant to Rule 506(c) of Regulation D, available exclusively to accredited investors, as defined by the Securities and Exchange Commission (SEC) and, if applicable, qualified purchasers, as defined by Section 2(a)(51) of the Investment Company Act of 1940. Verification of accredited investor status is required before participation in any investment.
Contact BAM Capital for details on current offerings. BAM Capital and its representatives are not fiduciaries or investment advisors. The information provided is general and may not reflect individual financial goals. Financial terms, projections, or forward-looking statements contained herein are hypothetical and should not be interpreted as guarantees of future performance or safety. Such statements reflect BAM Capital’s opinion and are subject to market fluctuations, economic conditions, and investment risks. Investing in private real estate securities involves significant risks, including, without limitation, illiquidity, economic downturns, and potential loss of invested funds or capital. Past performance does not predict or guarantee future results. Historical transaction figures represent past performance across multiple deals as of the date this information was published, not a single investment transaction. BAM Capital and its affiliates do not guarantee the accuracy or completeness of this information. Prospective investors are strongly encouraged to conduct independent due diligence and consult with legal, tax, and financial advisors before making any investment decisions.
© 2026 BAM Capital. All rights reserved.
