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The Rise of Renters: Top 7 Cities and the Shifting American Dream

Updated: Jan 4

Picture of a home which is available for rent

The traditional American Dream of homeownership is undergoing a transformation. As the U.S. increasingly becomes a nation of renters, understanding the dynamics of this shift is crucial for investors, especially in the multifamily real estate sector. Let's delve deeper into the cities leading this trend and the broader implications of this shift.

7 Top Cities with a Deep Pool of Renters

While the national homeownership rates have seen a modest uptick, several major U.S. cities are defying this trend. Here's a closer look at the cities where renting isn't just a necessity, but for many, a lifestyle choice:

  • Los Angeles (53.2% renters): The allure of Hollywood, combined with the city's sprawling urban landscape, makes LA a renter's paradise. High real estate prices further tilt the balance in favor of renting.

  • New York (48.7% renters): From the artsy lofts of Brooklyn to the high-rises of Manhattan, the Big Apple's dense population and eclectic neighborhoods make it a renter's haven.

  • San Jose (48.3% renters): As the heartbeat of Silicon Valley, San Jose's tech boom has brought in a wave of professionals, many of whom prefer the flexibility of renting.

  • San Francisco (45.1% renters): With its tech-driven economy and high living costs, San Francisco remains a top choice for those opting to rent over buying.

  • Austin (44.2% renters): The vibrant city of Austin, Texas, with its growing tech scene and cultural attractions, continues to attract new residents, many of whom choose the rental route.

  • San Diego (44.0% renters): The coastal charm of San Diego, combined with its pleasant climate, makes it a desirable place for many, leading to a significant portion opting to rent.

  • Miami (42.7% renters): Known for its beaches, nightlife, and cultural diversity, Miami's real estate landscape is heavily influenced by renters, with many choosing the flexibility and variety that renting offers over homeownership.

These cities, with their unique characteristics and high rental rates, present a compelling case for the changing dynamics of the American housing landscape.

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Understanding Why America is Seeing a Rise of Renters

Several factors are steering Americans towards renting:

  • Affordability: Renting is often more affordable than buying a home, especially in high-cost areas. The down payment on a home can be a major obstacle for many people, and renting can eliminate that need. Additionally, renters are not responsible for property taxes, home insurance, or maintenance costs.

  • Flexibility: Renting offers more flexibility than owning a home. Renters can typically move with less notice and less expense than homeowners. This can be a major advantage for people who are not sure where they want to settle down or who need to be able to relocate for work.

  • Lifestyle: Some people prefer the lifestyle of renting. They may enjoy living in a community with amenities such as a pool, gym, or clubhouse. They may also appreciate the fact that their landlord is responsible for maintenance and repairs.

Here are some other reasons why Americans may choose to rent instead of buy a home:

  • Student loan debt: Many Americans are struggling with student loan debt, which can make it difficult to save for a down payment on a home.

  • Job market: The job market is becoming increasingly transient, with many people moving for work on a regular basis. Renting can make it easier to move without having to sell a home.

  • Housing affordability crisis: The housing affordability crisis has made it difficult for many Americans to afford to buy a home. And with the Fed pushing interest rates higher, a mortgage just may not make sense or be attractive right now for people.

Investor's Corner: Navigating the Renter's Market

For those with an eye on the multifamily real estate sector, here are some insights:

  • Demand Dynamics: The projected supply for 2023-2025, coupled with absorption rates, signals a robust demand, which is a promising indicator for stable returns for passive investors.

  • Cost Considerations: With rising expenses, especially in insurance, savvy property management and cost-control strategies are essential.

  • Diversify to Thrive: While cities like LA and New York offer lucrative opportunities, diversifying across various markets can hedge against localized downturns.

  • Stay Ahead: The real estate landscape is ever-evolving. Regular market report reviews and understanding broader economic trends are crucial.

Key Takeaways

  • Renter-Dense Cities: Focus on cities with higher percentages of renters, as they can sometimes offer the most lucrative opportunities for steady rental income.

  • Economic Indicators: Keep an eye on broader economic trends, such as Federal Reserve decisions, which can influence borrowing costs and rental demand.

  • Diversification: Don't put all your eggs in one basket. Spread investments across different cities and regions to mitigate risks.

Are you ready to expand your portfolio? Join our Blue Lake Multifamily Fund

Final Thoughts

The shift from homeownership to renting is more than just a trend—it's a reflection of changing aspirations, economic realities, and lifestyle choices. For those looking to invest in the multifamily real estate sector, the opportunities are vast and varied.

Be Bold, Be Great, and Keep Pushing Forward!

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P.S. If one of your priorities, like mine, is building and preserving your wealth through multifamily real estate investments, click here to discuss how we can partner together.


Invest With Blue Lake Capital

If you are an accredited investor interested in learning more about passively investing in multifamily properties, click here to complete our investor form and schedule a call with our Investor Relations team.

About Ellie Perlman

Ellie Perlman

Ellie Perlman is the founder of Blue Lake Capital, a commercial real estate investment firm specializing in multifamily investing throughout the United States. At Blue Lake Capital, Ellie partners with both institutional and individual investors to grow their wealth by achieving double-digit returns by investing alongside her in exclusive multifamily deals they usually don't have access to.

A defining factor of Blue Lake Capital’s strategy is founded in utilizing machine learning/artificial intelligence throughout the course of all acquisitions and asset management. This advanced technology enables the company to produce accurate and data-driven forecasting for all assets on a market, property, and even tenant basis. In doing so, Blue Lake is able to lead commercial investments with the full capabilities of today’s technology.

Blue Lake Capital is the sponsor of REady2Scale, a podcast that highlights the assets, processes, and strategies for the multiple approaches to successful real estate investing.

Ellie started her career as a commercial real estate lawyer, leading real estate transactions for one of Israel’s leading development companies. Later, as a property manager for Israel’s largest energy company, she oversaw properties worth over $100MM. Additionally, Ellie is an experienced entrepreneur who helped build and scale companies by improving their business operations.

Ellie holds a Masters in Law from Bar-Ilan University in Israel and an MBA from MIT Sloan School of Management.

You can read more about Blue Lake Capital and Ellie Perlman at


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