Renters looking for a better deal may need to rethink the kind of properties they’re focused on in their search.
As of January, median single-family home rent prices are up about 41% since before the pandemic, according to a recent report by Zillow. Meanwhile, multi-family rents are up 26% in the same timeframe.
A construction boom of multi-family buildings helped rein in rent prices for apartment units in the U.S., prompting some economists to dub 2025 as a “renter’s market.”
But single-family rentals did not see that same level of construction, keeping the available supply low. Single-family rent growth also remains strong amid high demand, as high mortgage rates keep would-be buyers out of the for-sale market, Zillow noted in the report.
Multi-family housing often includes many units or separated dwellings within the same building, whereas a single-family rental is often in the form of a detached house.
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The typical asking rent price for a single-family home in January was $2,179, up 0.3% from a month prior, and up 4.4% from a year ago, Zillow found. Meanwhile, the typical asking rent for a property in a multifamily home was $1,820, up 0.2% from a month ago and up 2.7% from a year prior.
The gap between the costs to rent a single-family home versus a unit in a multi-family apartment is the largest difference Zillow has recorded since it began tracking the metrics in 2015.
But while there’s a lack of single-family rentals compared to multi-family properties, “demographics play a huge role here,” said Jessica Lautz, deputy chief economist at the National Association of Realtors.
If you can’t afford to buy a home yet, but need the space, here’s what the high cost of single-family rental housing means for you.
‘Renters are stuck renting for longer’
The millennial generation — those born between 1981 and 1996 — has had a tough time getting into homeownership.
The typical first-time homebuyer in the U.S. is now 38 years old, an all-time high, according to a 2024 report by NAR.
“Renters are stuck renting for longer,” said Orphe Divounguy, an economist at Zillow.
This means many people are staying renters for longer. Zillow found in a separate 2024 report that the median age of renters in the U.S. is 42, and millennials make up about 31% of renters in the U.S. In Zillow’s analysis, millennials were those age 30 to 44 at the time of the survey.
As homeownership has become “so unaffordable and out of reach,” the cohort has had to find bigger rental properties to accommodate major life changes, such as getting married, and having kids or pets.
The appeal of single-family rentals, experts say, is a homeownership experience without the same costs. That can be meaningful for buyers who are faced with affordability challenges in the for-sale market. Coming up with the down payment can be a hurdle, as well as navigating volatile mortgage rates and rising home prices.
The median sale price for homes nationwide was $375,475 in the four weeks ending February 16, up 3.7% from a year prior, according to Redfin.
Meanwhile, the average 30-year fixed rate mortgage inched down to 6.87% the week ending Feb. 13, per Freddie Mac data. That’s the lowest so far in the year, and down from the latest peak of 7.04% in January.
What to do in the meantime
Factors like “having a strong income, strong credit score and lower debt-to-income ratios” are essential for renters in looking into single-family rental homes, Divounguy said.
Paying down debt can help improve your debt-to-income ratio, which measures your debt repayment obligations relative to your income.
When landlords look at your financials, it helps them gauge how easily you can afford the rent based on your current income.
This measure is even more important for renters looking into single-family rental properties, Divounguy said. If you plan to buy a home in the future, keeping this in check will increase your chances of having an approved mortgage application.
Overall, stay on top of your bills and make sure to keep tabs of your credit reports from the major bureaus to ensure there are no errors that could be problematic when you apply. Having a solid credit history makes you more competitive as a renter, and it can also set you up for success if you ever look at the for-sale market, experts say.