The median home price in the U.S. stood at $416,900 in the first quarter of 2025. With median household income at about $80,600, a buyer would need a 30-year mortgage interest rate closer to 4 percent to keep housing expenses at or below the 30 percent of income affordability threshold. Today’s rates continue to hover around 7 percent, making monthly costs unsustainable for many. When property taxes and insurance are factored in, the gap widens even further.
This affordability divide underscores a persistent reality: millions of those living in the U.S. simply can’t buy right now, even if more homes are available. Instead, they’re remaining in the rental market, but that too is becoming increasingly strained.
The national rent-to-income ratio has surged to nearly 47 percent, well above what is considered affordable, according to a recent Experian rental market report. For the 62 percent of renters who fall into the low- to moderate-income bracket, that share climbs to more than 55 percent, up sharply from prior years. At the same time, average renter income has declined slightly, heightening the pressure.
This strain is felt unevenly across the U.S. California, already the most housing cost-burdened state, saw month-over-month median rent rise 2.63 percent in May to $3,900, according to RentSpree data. In contrast, Texas, buoyed by a more robust housing supply, saw median rent fall 10 percent to $1,800, along with a 4 percent decline in maximum rent levels to $8,800, offering at least some localized relief.
In Florida, the story is more mixed. While the median rent fell 11 percent to $2,500 in May, RentSpree data shows the highest-end rentals rose nearly 6 percent, hitting $9,000, evidence that luxury demand remains strong.
Demographically, renters now span every generation, from Gen Z, who make up 34 percent of all renters according to the Experian data, to Baby Boomers, who are increasingly choosing to rent due to financial limitations or lifestyle flexibility. Research shows a 14 percent increase in renters aged 44 and older between 2023 and 2025, a notable shift that points to the long-term role of renting in the U.S. housing system.
Rental vacancy rates rising to 7.1 percent in Q1 2025, up from 6.6 percent in the first quarter of 2024 may signal some relief ahead. Some supply could stem from sellers unable to offload their homes in today’s market as potential buyers retreat due to high property prices and borrowing costs. Hence, some homeowners may opt to rent out their homes instead, especially in price-stagnant markets. This shift could boost rental inventory in select regions but is unlikely to move the needle significantly on affordability.
The bottom line is that renting is no longer just a temporary bridge to homeownership but a lasting reality for a significant growing portion of the U.S. population. But while it remains the key alternative to home ownership, renting is far from affordable. In many parts of the country, it comes with steep financial burdens. Regional differences only sharpen this divide.
Rent spikes in California, relative affordability in Texas, and sharply tiered markets like Florida all illustrate how location can either ease or intensify the strain. Despite a softening for-sale market, many renters remain priced out of ownership, cementing rental housing as a core, and increasingly permanent, pillar of the U.S. housing landscape.
Michael Lucarelli is the CEO of RentSpree.
This column does not necessarily reflect the opinion of HousingWire’s editorial department and its owners.
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