What Homeowners Need to Know About the 2025 Rental Market Shift

The 2025 rental market is undergoing significant changes that homeowners must understand to stay ahead. From shifting resident expectations, to evolving regulations and economic factors, here’s what you need to know to maximize your rental property’s success.

1. Demand for Single-Family Rentals is Rising

The demand for single-family rental homes continues to grow, fueled by rising homeownership costs and lifestyle preferences. According to the U.S. Census Bureau, the number of renter-occupied single-family homes increased by 18% from 2016 to 2024, a trend expected to continue into 2025.

2. Rental Price Growth is Stabilizing

After several years of steep increases, rental price growth is expected to stabilize in 2025. A report from Zillow projects a 3% nationwide increase in rental prices, down from the 7% average annual growth seen between 2020 and 2023. While this means fewer record-breaking rent hikes, it also signals a more predictable market, reducing turnover and vacancies for well-maintained properties.

3. Interest Rates and Home Prices Affect Landlord Decisions

With mortgage interest rates hovering around 6.5% (per Freddie Mac’s December 2024 data), many potential buyers are choosing to rent longer. This keeps rental demand strong but also means homeowners should be strategic about pricing and lease terms to attract reliable residents.

4. Regulation Changes and Tenant Protections

Cities and states continue to implement new rental laws, including stricter eviction rules, rent control policies, and maintenance obligations. For instance, California’s AB 1482 caps annual rent increases at 5% plus inflation, a trend other states are considering. Homeowners should stay informed about local regulations to ensure compliance and avoid costly legal issues.

5. Residents Expect More Than Just a Home

Today’s renters prioritize convenience, digital accessibility, and responsive property management. A National Multifamily Housing Council survey found that 62% of residents prefer properties with smart home features like keyless entry and smart thermostats. Offering modern amenities and professional management solutions can set your rental apart in a competitive market.

6. Long-Term Leases Are Gaining Popularity

With economic uncertainty persisting, many residents are looking for stability through longer lease agreements. A study by Rent.com found that 68% of renters prefer leases longer than one year, citing security and rental price predictability as key factors. Homeowners who offer extended lease options may benefit from reduced turnover and consistent rental income.

7. The Short-Term Rental Market Faces Challenges

Short-term rental platforms are facing increased regulations and declining profitability in some markets. A 2024 AirDNA report shows a 12% decrease in short-term rental occupancy rates across major U.S. cities, making long-term leasing a more viable alternative for many homeowners.

How Homeowners Can Adapt

To thrive in the evolving rental landscape, homeowners should consider property management alternatives like Belong that streamline leasing, maintenance, and resident communications. Partnering with a trusted company can help you navigate market shifts while maximizing rental income and minimizing hassle.

Final Thoughts

The 2025 rental market presents both challenges and opportunities. By staying informed and adapting to changing resident needs, economic trends, and regulations, homeowners can position themselves for long-term success in the rental market.

Looking to optimize your rental experience? Belong makes it easy for homeowners to rent out their properties with confidence, offering end-to-end management, guaranteed rental income, and an unmatched resident experience.

Disclaimer: We don’t enjoy using the word ‘landlord’. We prefer to refer to members in our network as homeowners and residents, not landlords and tenants, since we’re on a mission to upend and redefine the traditional landlord-tenant relationship. That said, this article is for homeowners taking the leap for the first time who are looking for answers with more common industry terms like ‘landlords’ and ‘tenants’, so in some instances we have had to stick to the old moniker for owners of rental homes. This article is not intended as financial advice.