High mortgage rates suppress both buyer demand and home value growth, resulting in increased competition for rental units. While multifamily rental growth is stable, the construction of detached homes is lagging. The millennial generation is increasingly turning to rentals due to financial strains, including hefty down payments. Zillow reports a high percentage of rental listings include concessions, making renting more attractive. Although for-sale inventory is rising, it remains lower than pre-pandemic levels, yet this could lead to softer price growth moving forward as more sellers enter the market.
"Right now, more multifamily units are hitting the market than at any time in the past 50 years, but detached homes aren't seeing the same surge in construction."
"A record-high share of 41% of rental listings on Zillow last month included at least one concession, such as a month of free rent or free parking."
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