The U.S. housing market continues to shift dramatically, with an increasing number of renters choosing to stay in their current residences for extended periods. As affordability remains a major hurdle, particularly in California, many households are opting to delay homeownership or avoid relocation altogether. The rise in rental tenure is a direct response to soaring home prices, high mortgage rates, and a limited supply of affordable housing.
The Growing Disparity Between Renting and Buying
In 48 of the 50 largest metropolitan areas, renting is now more cost-effective than purchasing a home. According to recent data, the national median rent in January 2025 was $1,703. While this marks a decline compared to previous years, it is still significantly higher than pre-pandemic levels, with a $257 increase since January 2020.
On the other hand, home prices remain steep, with the median listing price reaching $400,500. Higher interest rates and tight inventory levels continue to push the dream of homeownership further out of reach for many Americans. The imbalance is especially pronounced in high-cost states like California, where home prices are among the highest in the country.
A closer look at the numbers reveals that only Detroit and Pittsburgh currently offer more affordable homeownership opportunities than renting. In most other cities, the financial burden of buying a home outweighs the benefits of ownership, forcing prospective buyers to remain in the rental market longer than anticipated.
California’s Housing Affordability Crisis
California has long been at the center of America’s housing affordability crisis, and the current market conditions have exacerbated the situation. The state’s home prices have surged to the point where even middle-income earners struggle to afford property.
For instance, in Los Angeles, a median-income household would need to allocate nearly 75% of their earnings toward homeownership costs, while renting requires about 36% of income—a much more manageable percentage. This stark contrast has led many renters to forgo the idea of purchasing a home and instead opt for stability in their current rental properties.
Several factors contribute to California’s challenging housing landscape, including:
- Skyrocketing Home Prices – Limited inventory and high demand keep property values elevated, making homeownership an unattainable goal for many.
- High Mortgage Rates – Rising interest rates further inflate monthly mortgage payments, deterring potential buyers.
- Natural Disasters and Housing Shortages – Wildfires, earthquakes, and other natural disasters have destroyed thousands of homes, further limiting available housing stock and increasing demand for rental properties.
Most notably, Los Angeles County has suffered significant losses due to wildfires, with over 16,000 structures destroyed in recent years. The shrinking housing supply has placed added pressure on the rental market, causing further price hikes and leaving fewer affordable options for tenants.
Why Renters Are Staying Put Longer
With the cost of homeownership rising, many renters are delaying moves or choosing to remain in their current residences indefinitely. A study comparing rental patterns from 2017 to 2022 found that the number of renters moving within one year or less dropped by nearly 5%, while those staying in the same unit for five years or more increased by two percentage points.
This trend is largely driven by economic uncertainty and the financial risk of moving. Key reasons renters are hesitant to relocate include:
- Higher Rental Costs Elsewhere – While some may want to move, they are finding that rents in desirable areas are increasing, making relocation less appealing.
- Lack of Affordable Housing Options – Limited availability in major cities means tenants have fewer alternatives when searching for new rental properties.
- Security and Stability – Many renters prefer to stay in place rather than face the stress and uncertainty of moving, particularly in a volatile housing market.
- Landlord Incentives for Long-Term Tenants – Some property owners offer lease renewals with minimal rent increases to retain reliable tenants, reducing turnover rates.
What This Means for the Rental Market
The growing trend of long-term renting has several implications for the broader housing market. While extended rental tenures can promote stability within communities, they also create challenges, including:
- Reduced Rental Inventory – Fewer tenants moving out means there are fewer available rental units, increasing competition among new renters.
- Potential Rent Increases – As demand continues to rise, landlords may raise rental prices, making it even harder for new renters to secure affordable housing.
- Delayed Homeownership – More renters delaying home purchases could result in an aging population of renters who struggle to transition into homeownership later in life.
For property managers and landlords, these trends highlight the importance of balancing tenant retention with fair pricing strategies. Meanwhile, policymakers must address the root causes of housing unaffordability by investing in affordable housing developments, implementing rent stabilization measures, and exploring innovative solutions to ease the housing burden.
The Future of Renting in High-Cost Markets
As economic uncertainty continues and affordability remains a challenge, the trend of renters staying put is expected to persist. Until significant changes are made to address housing shortages and affordability issues, long-term renting will likely become the norm for a growing segment of the population—particularly in high-cost regions like California.
For renters, this shift means adapting to a more competitive market, planning for potential rent increases, and exploring financial strategies to build long-term housing security. For the real estate industry, it presents an opportunity to rethink housing policies and develop sustainable solutions that ensure stability for both renters and homeowners alike.
Source:
Renters Stay Put Longer as Housing Costs Soar Across U.S., Especially in Unaffordable California