High home prices and elevated mortgage rates have created a barrier to homeownership, encouraging families to rent, according to Marcus & Millichap. This trend benefits the multifamily sector, while dampening demand for home-related retail products — but overall retail occupancy remains strong.
Homeownership Trends
The median age of first-time homebuyers rose to 40 in 2025, up from 38 in 2024, 36 in 2022 and 30 in the three decades prior.
The average fixed rate on a 30-year mortgage as of mid-November was 6.3%, compared with a range of 3.5% to 5% from 2011 to 2020.
When mortgage rates dropped to 2.7% in early 2021, millennials in their 30s drove a surge in homebuying, with home sales hitting $5.8M annualized in late 2020 — a 14-year high that pushed prices higher. The median price of a single-family home in 2025 was $421,000, up from $283,000 in January 2020.
Freddie Mac estimates only 28% of U.S. households qualify for a mortgage on a median-priced home and monthly mortgage payments for those who qualify are $1,200 higher than average apartment rent, discouraging homeownership.
Impact on Multifamily
Record net absorption occurred in 2024 to 2025 as renters stayed put. Lease renewal rates exceeded 55%, surpassing the long-term average of 49%. Declining construction for both single-family and multifamily housing suggests home prices will remain elevated, supporting rental demand.
According to Newmark, affordability challenges, a tight supply pipeline and investor confidence support the sector’s resilience.
Net absorption slowed in Q3 2025, signaling normalization after historically elevated levels. While leasing activity has moderated, the Sun Belt continues to outperform, led by Atlanta, Dallas, Phoenix, Austin and Charlotte, N.C.
Rent growth declined 0.1% year-over-year due to new rental inventory in high-supply markets. The strongest growth occurred in supply-constrained markets such as San Francisco, Chicago and New York City.
On the capital markets side, multifamily debt originations rose 48% year-over-year — the fastest pace since 2021 — reflecting renewed confidence and improving liquidity. Sales volume climbed to $43.8B, up 12.6% from a year earlier, as investors seek opportunities.
Current trends show a preference for newer, higher-quality assets, particularly in the Sun Belt, where demographics and employment continue to grow. The Midwest is also attracting investors due to its stable fundamentals and competitive pricing.
Impact on Retail
Home-related product sales, which make up 7% of overall retail sales, have fallen 20% since peaking in early 2021 following the homebuying surge, Marcus & Millichap reports. Despite this, retail vacancies at lifestyle and power centers — experience-driven hubs with big-box stores, dining and entertainment, often near multifamily communities — remain low at 4.7%, matching rates at grocery-anchored, unanchored and single-tenant centers. This indicates that declining home-related sales have not weakened overall retail occupancy.
