Long-Term Renting: A Lifestyle Choice and What It Means for Multifamily Real Estate Investing

As someone who closely follows housing trends and market data, I’ve noticed a significant shift in how people view renting. It’s no longer seen solely as a temporary solution or a stepping stone to homeownership. A recent Harris Poll revealed that 60% of Americans who rent or lease goods and services believe the idea that buying is always better than renting is outdated. For many, renting has become a deliberate, long-term lifestyle choice. For others, they are being priced out of the market with the rising housing costs and interest rates. The New York Times article, “Renting Forever and Trying to Create a Strong Financial Future,” points out that the median house price in the 1960’s was a little over twice as much as the average income. It is now nearly 6x as much. These changes are having a meaningful impact on investing in the multifamily industry.

Renting as a Lifestyle Choice

More people today are choosing to rent because of the flexibility and convenience it offers, allowing them to avoid long-term commitments. Renters value the flexibility to relocate easily for jobs or personal reasons without the constraints of homeownership. According to Forbes, Millennials change jobs three times more often than any other generation. Meanwhile, Freddie Mac survey data shows that Gen Z adults acknowledge the benefits of renting, citing flexibility (76%), being close to the “action” (65%), and less stress than owning (63%) as positives to renting.

The perception of homeownership has shifted and is no longer seen as the ultimate status symbol or a surefire way to secure retirement. Instead, many renters prefer the liquidity of the stock market and the freedom that comes without maintaining a home.

What stands out is how this trend extends across age groups. It’s not limited to young professionals renting before purchasing a home. In the U.S., data reflects an increasing number of individuals and families opting for long-term rental arrangements, often influenced by the rising costs associated with homeownership. In some markets, renting is simply more affordable. Freddie Mac recently reported that a typical applicant living in a single-family rental would pay $600 more per month to buy their desired house—32% higher than their current rent.

The Case for Multifamily Investment

The shift toward renting as a long-term lifestyle choice coupled with the historical gap between renting and owning offers a unique opportunity for multifamily investors. As renting becomes a deliberate choice for those who might have historically purchased a home, and as rising costs make homeownership increasingly unattainable for others, multifamily properties are uniquely positioned to address this growing demand. This evolution in renter attitudes—driven by flexibility, convenience, and changing financial priorities—suggests sustained occupancy and rental income growth in the years ahead.

Investing in multifamily real estate today means capitalizing on a structural change in how people approach housing. Multifamily investments offer resilience against market volatility, access to thriving rental markets, and tax-advantaged income streams. By partnering with an experienced sponsor, investors can seize this opportunity to participate in a sector that not only adapts to modern housing preferences but thrives because of them.

As the lines between renting and owning blur, multifamily real estate is just not an alternative—it’s the clear choice for those seeking stable, scalable, and forward-thinking investment opportunities.

Sources:

https://www.freddiemac.com/research/insight/20241112-the-decline-in-relative-housing-affordability

https://freddiemac.gcs-web.com/news-releases/news-release-details/Freddie-mac-new-survey-shows-gen-z-apprehensive-about-path

https://freddiemac.gcs-web.com/node/26271/pdf

https://www.nytimes.com/2024/05/19/business/renting-forever-investing.html