Rentership Soars as Homeownership Hits a Wall in 2025

America’s homeownership rate has experienced its first decline since 2016, signaling a notable shift in the nation’s housing dynamics, according to a new analysis by Redfin. In the second quarter of 2025, the number of U.S. homeowner households decreased by 0.1% year-over-year to an estimated 86.2 million, while the number of renter households increased by 2.6% to 46.4 million—one of the largest annual increases in recent years. Despite the marginal dip in homeowners, the overall homeownership rate remained relatively steady at 65%, and the rentership rate at 35%, compared to 65.6% and 34.4%, respectively, a year earlier [1].

The decline has been attributed to a combination of factors, including rising home prices, high mortgage rates, and economic uncertainty. The median home sale price rose to $443,867 in July 2025, marking a 1.4% increase year-over-year and the highest July figure on record. Mortgage rates, currently at 6.56%, are more than double the all-time lows recorded during the pandemic [2]. These conditions have made home ownership increasingly difficult, leading more Americans to choose renting over buying. Chen Zhao, Redfin’s head of economics research, noted that shifting demographics also play a role, as individuals are getting married and starting families later, which impacts the timing of home purchases [1].

The shift is also evident in the geographic distribution of homeownership and rentership rates. The report highlights sharp disparities across major U.S. metropolitan areas. Los Angeles and New York, for example, have homeownership rates below 50%, with over half of households renting. In contrast, North Port, Florida, recorded the highest homeownership rate among large metro areas at 79.5%. Other Sunbelt cities such as Baton Rouge, Louisiana, and Charleston, South Carolina, also maintained high homeownership rates, suggesting that affordability and housing supply in these regions remain relatively favorable [1].

Salt Lake City, Utah, saw a homeownership rate of 60.6% in the second quarter of 2025, below the national average, while rentership reached 39.4%. Utah Gov. Spencer Cox has initiated efforts to increase the state’s supply of affordable housing, aiming to build 35,000 new starter homes by 2028 and expanding the initiative to include starter condos [1]. This comes as the cost of homeownership in Salt Lake has been found to be more than twice that of renting, further complicating the economic calculus for potential buyers.

The recent decline in homeowner households may also indicate a broader transformation in how Americans view housing. While the U.S. housing market has seen a flattening trend, the increase in renter households suggests that renting is becoming more accepted as a long-term option, especially for individuals who perceive it as more economically viable. This trend is supported by data showing a growing number of millionaire renters, a concept discussed in recent analyses by Ritholtz Wealth Management COO Nick Maggiulli [3]. As mortgage rates begin to fall from their peak of over 7% early in 2025, some buyers are returning to the market, but affordability and economic uncertainty continue to temper broader growth.

The U.S. housing market’s stagnation reflects broader economic shifts, including inflation, rising tariffs, and uncertainty in the labor market. These factors collectively contribute to a challenging environment for potential homeowners and underscore the complexity of the current real estate landscape. While the homeownership rate may remain stable for now, the subtle but significant drop in the number of owner-occupied households highlights the evolving dynamics of housing in America [3].

Source:

[1] U.S. homeownership dips for the first time since 2016 (https://www.deseret.com/utah/2025/09/03/fewer-households-own-homes-new-analysis-shows-but-homeownership-rates-steady/)

[2] Homeowner Population Stops Growing for First Time Since ... (https://www.redfin.com/news/homeownership-rentership-rate-q2-2025/)

[3] America's homeownership rate falls for the first time since ... (https://fortune.com/2025/09/05/homeownership-rate-negative-declines-stops-growing-renting-housing-real-estate-redfin/)