There are a lot of reasons why people choose to buy versus rent and the other way around.
However, the recent rise in mortgage rates has created a record affordability gap in favor of renting relative to single-family.
There's a $389 difference in the principal interest payment on a mortgage and for a medium-priced home versus the average rent.
Recommended For You
It continues to grow every day, said Cushman & Wakefield's Head of Multifamily Insights, Sam Tenenbaum, during a recent Cushman & Wakefield news video.
The average 30-year fixed mortgage rate recently touched 7.09%, the highest since April 2002.
As interest rates hit a 20-year high, households are increasingly seeing financial upside in renting versus buying.
"It's cheaper to rent," Tenenbaum said. "And that doesn't even count the other costs of buying a home such as taxes, insurance, and upkeep.
Tenenbaum said that rising mortgage costs are one of the key reasons that Q2 featured 85,000 units in apartment demand – a figure 60% higher, year over year.
"While the disconnect of the two won't necessarily encourage homeowners to sell their homes and become renters, it does create sizable incentives for new homeowners to consider renting over buying," he said.
Furthermore, "This will support longer-term rental demand and will help apartment assets preserve more of their value even as we enter challenging economic times."
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
