The American Dream House Is Getting Harder to Buy or Rent
Many Americans are priced out of buying a home, but they’re also running out of single-family homes to rent.
A new study reveals that renting a starter home is now more expensive than buying one in most major U.S. cities, according to Realtor.com's July 2026 Rent Report. The median asking rent for 0-2 bedroom properties across the 50 largest metropolitan areas was $1,695 last month, a 1.4 percent decrease from the previous year. In contrast, the estimated monthly cost of buying a starter home was $2,553, $858 higher than renting.
This report shows a dramatic shift in the American Dream, as renting has become the primary housing option for many. Single-family rentals have declined to their lowest levels on record, with only 13.7 percent of single-family homes occupied by renters in 2024. In comparison, there were 10 million rental units in small multifamily buildings and 3.1 million townhome rentals.
The increase in large multifamily buildings began after the Great Recession and accelerated during the pandemic, as developers focused on building rental properties for homebuyers who couldn't afford single-family homes. Rising construction costs, strict zoning laws, and minimum lot sizes have contributed to a decline in the availability of starter homes, which made up 40 percent of new construction in the 1980s but only 7 percent in 2019.
The gap between renting and buying starter homes is narrowing in some markets, such as Oklahoma City, Orlando, Florida; Seattle; Miami; Tampa, Florida; Las Vegas; and Nashville. However, the median age of first-time homebuyers has reached an all-time high of 40 years old, and first-time buyers now make up just 21 percent of all home sales.
Written by urgent.news from Newsweek's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
