Homebuying Challenges Continue to Drive Apartment Demand

Homebuying Challenges Continue to Drive Apartment Demand

Affordability hurdles in the single-family housing market are keeping more Americans in the renter pool, pushing apartment lease renewals well above historical norms, according to a new multifamily report from Marcus & Millichap.

Citing government and industry data, the firm noted that the median age of first-time homebuyers has climbed to 40 this year—up from 38 in 2023 and 36 in 2022. “From 1993 to 2018, the median age of first-time buyers ranged from 30 to 32,” the report said. “Elevated interest rates and rising home prices have been driving this upward trend.”

As of mid-November, 30-year fixed mortgage rates averaged roughly 6.3%, far higher than the 3.5% to 5% annual averages seen from 2011 to 2020. Despite only a modest 5% increase in single-family home prices since 2022, the typical monthly mortgage payment on a median-priced home is now about $1,200 more than the average apartment rent—“a gap that few households are willing or able to bridge,” the report noted.

The affordability barrier is reshaping rental dynamics. Marcus & Millichap reported record levels of apartment move-ins relative to move-outs in 2024 and the first half of 2025. Lease renewals have surpassed 55%, well above the long-term average of approximately 49%, based on data through October 2025.