The housing squeeze is quietly reshaping where Americans can live and work

Finding an affordable place to live right now is a challenge—but it’s one that different groups of Americans are grappling with in a variety of ways.

A new report from Realtor.com explores the distinct barriers to affordable housing that renters face in an economy that has many budgets stretched thin. In the analysis, which draws on 2024 surveys of the country’s 100 biggest metro areas, Realtor.com found three distinct groups emerge in the U.S. rental market data: young renters, family renters, and long-term renters. The one thing those groups share in common? Making decisions about where to live is an exercise in financial survival these days—not a lifestyle choice. 

“We often hear that today’s renters are choosing to rent because they don’t want to be homeowners or are choosing to be ‘forever renters’, but in order to understand what’s holding renters back, we need to know who they are, where they are, and why they’re renting,” said Realtor.com Chief Economist Danielle Hale said in the report. 

“America’s rental landscape is being shaped by cost and geography in ways that limit flexibility for almost every type of tenant. Whether it’s young professionals moving inland for breathing room or families in high-cost markets stuck behind an affordability wall.”

Young people are heading inland for jobs and cheaper housing

The group of young renters makes up 32% of all U.S. renter households and includes adults under age 34. The average young renter household is headed by a 28-year-old, has two people living who make $65,000 a year living in a two-bedroom unit. Interestingly, Realtor.com found that most people in this group aren’t living in Los Angeles and New York, instead opting for mid-size cities with more affordability and reliable job markets. The top spots include Colorado Springs, Austin, and Denver.

“The shift is driven by a massive affordability gap: in the top 10 young renter markets, an average of 52.6% of renters can afford a fair market rent, compared to just 32.0% in Miami and 33.6% in Los Angeles,” the report states. Affordability is a huge piece of the puzzle, but unemployment rates were also lower in cities with high concentrations of young renters, suggesting that jobs in those markets with lots of employment opportunities.

Family renters face unique barriers 

In contrast to young renters who often live alone when they can afford to, family renters represent the biggest chunk of the U.S. rental market at 44%. The average family renter household is headed by a 42-year-old, has three members living across two bedrooms, and makes around $68,000 per year. 

While family renters share their average income and square footage with young renters, these often minority households face a different set of systemic challenges. Family renters are concentrated in cities with majority-minority populations across California, Texas, Florida, and Hawaii. Realtor.com’s data specifically cites Stockton, and Riverside in California and McAllen, Texas as the cities with the highest percentage of family renters in the U.S—all cities with majority Hispanic populations.

Unlike the young renters, this swath of the U.S. population faces historic barriers to homeownership and affordability. Home prices now outstrip the income of the median American family, particularly in many of the markets where family renters are most common. “This affordability wall is compounded by structural barriers that persist regardless of market conditions—unequal access to credit and limited intergenerational wealth have produced a homeownership gap that remains wide and well-documented,” the report states.

Long-term renters are locked in across major cities

Young people aren’t headed to the biggest, most expensive markets for good reason. In cities like New York and Los Angeles, a larger share of renters stay in place for five or more years thanks to longstanding rent control policies that keep the price of housing down. But much like low mortgage rates for homeowners, that lock-in effect can be a double-edged sword that freezes people in place and limits their financial mobility.

Realtor.com’s report notes that renters in “overflow” markets around some of America’s biggest, priciest urban centers see a similar phenomenon. A renter might leave Boston to move to Providence for more housing affordability only to be boxed in by rising rents in those markets too. 

Across the top ten cities with high concentrations of long-term renters, 39% of renter households would have a difficult time affording their housing if they had to move within the same city and pay a fair-market rate for rent. The report cites Providence, Rhode Island and Bridgeport, Connecticut as the two cities where renters couldn’t shoulder the burden of paying rent at market rates. The report notes that some long-term renters, particularly seniors, might be locked in for the right reasons, but many others simply wouldn’t be able to afford to live somewhere else.

“When you look beneath the national averages, you see a market that is failing to provide mobility,” Realtor.com economist Jiayi Xu said. “The lack of new, affordable inventory means that for many, the ‘American Dream’ of choosing where you live has been replaced by the necessity of staying exactly where you are.”

View the full article