In the upcoming housing transition, the key factor will not be the quantity of units built but rather who has control over the rental process.
For a long time, the focus of discussions around rentals has been on the increasing demand, longer rental durations, and the dwindling paths to homeownership. This narrative is familiar to most real estate professionals by now.
What is changing now is something more significant – the rental market is moving into an era of infrastructure.
This shift is different because the demand for rentals has grown to a scale that existing systems were not designed to handle. The construction of multifamily properties has introduced a significant amount of inventory in urban and high-growth areas, while single-family rentals continue to be popular in suburban and secondary markets. Together, these factors have elevated rentals from a secondary market to a permanent component of the U.S. housing landscape.
However, with scale comes changes.
In the past, when rentals were sporadic, inefficiencies were manageable. But as rentals become a continuous part of the market, inefficiencies become obstacles.
Agents are already experiencing this shift, even if they may not articulate it in these terms. Rental inquiries are outpacing sales leads, application volumes are compressing timelines, and landlords and renters alike expect a more professional and efficient process.
Despite this, much of the rental workflow still relies on tools and practices that were created for a smaller market.
This brings us to the uncomfortable truth – rental demand is growing faster than the infrastructure that agents rely on to meet that demand.
The growth of multifamily properties has been a significant driver of this transition. Apartments now make up about one-third of all rental housing, surpassing single-family rentals for the first time. This shift is not just about where renters live but also about the volume of transactions. High-density rentals result in more listings, applications, and transactions, thereby exposing inefficiencies.
Meanwhile, single-family rentals remain strong, with rent growth for detached homes outpacing multifamily properties in many areas. This market is not moving in a single direction but expanding on multiple fronts simultaneously.
What is often overlooked is who is fueling this expansion.
Despite the focus on institutional ownership, the rental market is still predominantly fragmented, with independent landlords owning the majority of rental properties. These landlords rely on agents for pricing insights, risk management, and operational support.
As rental volume grows, these expectations increase.
This is where the role of agents evolves. Rentals are no longer temporary transactions but a system that needs to operate efficiently at scale. Agents who view rentals as crucial infrastructure, data-driven, and professional will establish long-lasting relationships in the market.
The industry’s future will not be determined solely by inventory or construction trends but by who controls the rental process. Who standardizes the workflow and enhances the rental experience to align with the broader real estate sector.
It is no longer a question of whether rentals matter – that has been answered. The real question now is whether the industry is ready to handle rentals at scale.
Michael Lucarelli is the CEO of RentSpree.
This column does not necessarily reflect the opinion of HousingWire’s editorial department and its owners. To contact the editor responsible for this piece: [email protected].
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