2025: A Renter's Market - Redfin Economist Explains Why

In the coming years, the housing market is expected to favor renters, according to Redfin economist Taylor Marr. As demand outstrips new inventory, home prices are set to rise, making homeownership less affordable. Meanwhile, mortgage rates are likely to remain near 7%, further pricing out potential buyers. This dynamic will lead to an increase in home sales, but many would-be buyers will opt to rent instead. Rental prices, however, are expected to stay flat while wages increase, improving affordability for renters.



The increase in rental supply, due to the pandemic apartment-building boom, will also affect rental affordability and concessions offered by landlords in 2025. According to Redfin, there will be more new rentals coming on the market, creating a surplus of supply over demand. This surplus will motivate landlords to offer concessions like free parking, a free month of rent, more amenities, or a hiatus on rent increases to retain residents. As a result, rental affordability will improve, making rent payments more affordable for the typical American as wages rise.



In 2025, the rental market is expected to favor tenants due to flat rental prices and rising wages. According to Redfin, the median U.S. asking rent will remain flat year over year, making rent payments more affordable for the typical American as wages increase. This affordability improvement, coupled with the rising cost of buying a home, will likely lead many Americans to choose renting over homeownership.

The expected flat rental prices and rising wages will influence the decision of Americans to rent or buy a home in 2025. As wages rise, rent payments will become more affordable for the typical American, while home prices are expected to increase at a faster pace due to limited inventory. Additionally, inflation may erode the purchasing power of homebuyers, making renting a more attractive option.

In conclusion, 2025 is expected to be a renter's market, with rental affordability improving due to an increase in supply and flat rental prices. Meanwhile, homeownership will become less affordable as home prices rise and mortgage rates remain high. This dynamic will likely lead many Americans to choose renting over homeownership in the coming years.