Economic trends are favoring renting over homeownership and a widening cost gap is emerging, reports Newmark in its third quarter United States Multifamily Capital Markets Report, which includes an overview of demand drivers, leasing markets, debt capital markets, investment sales and pricing, and returns.
The gap between homeownership and rental costs increased by 7.6 percent year-over-year, amounting to $1,203 in the third quarter. The market saw record-high interest rates, placing renting as much more cost-effective than owning a home. New mortgages are significantly higher than the effective interest rate on mortgage debt, at 52.8 percent. Nationwide, the cost of a single-family home is 24.7 times higher than the cost to rent an apartment, according to Newmark’s report. In addition, owning a home requires 41 percent more income than current median household incomes. Ultimately, purchase applications have declined throughout 2024.
The apartment leasing ma
