Why Renting Is Increasingly Becoming the Rational Choice—and What It Means for U.S. Apartments
A recent Economist article makes a compelling case that renting is no longer a short-term compromise—it’s increasingly the financially rational choice across much of the developed world, especially in the U.S.
After a decade of ultra-low interest rates that favored homeownership, the math has flipped. Higher mortgage rates mean that the all-in monthly cost of buying a home now exceeds renting by hundreds of dollars nationally—and far more in major metros. Even with modest rate cuts, long-term borrowing costs remain elevated, keeping ownership affordability under pressure.
The article also challenges a long-held assumption: that renting is “throwing money away.” Historical research shows that renters who invest the savings from lower monthly housing costs can match—or even outperform—homeowners in terms of wealth accumulation, depending on market and timing.
From an apartment demand perspective, this matters:
• Higher-for-longer mortgage rates keep households in the renter pool
• Sticky home prices limit affordability relief for buyers
• Lifestyle flexibility increasingly outweighs ownership sentiment
• Regulatory pressure on landlords discourages new for-sale supply, indirectly supporting rental demand
While emotional and lifestyle factors will always drive some households to buy, the financial case for renting now spans income levels and age cohorts. Without a sharp drop in either home prices or long-term interest rates, renting is likely to remain the default option for many Americans.
Bottom line: this is not a cyclical blip—it looks more like a structural tailwind for U.S. apartments.
View the full article in the Economist here.