Millennial Homeownership Trends and the Rise of Build-to-Rent Living
Millennials are now America’s largest generation, but when it comes to homeownership, they’re falling far behind their parents—and redefining what the American Dream looks like. In fact, just 47% of Millennials own homes, compared to 65% of Gen Xers and 74% of Baby Boomers, according to the 2025 Millennial Homeownership Report from Apartment List.
At the heart of this generational gap is one stubborn obstacle: affordability. Nearly three-quarters (72%) of non-owning Millennials cite an inability to afford a down payment as their primary barrier to homeownership.
As Millennials push into their 30s and 40s—traditionally prime homebuying years—many are finding that homeownership simply isn’t feasible, especially in high-cost urban markets. Instead, a new housing model is gaining traction with both renters and investors: Build-to-Rent Single-Family Homes (BTR-SFR).
Key Takeaways
- Only 47% of Millennials own homes, trailing previous generations at the same age.
- BTR-SFR is reshaping rental living, offering more space, privacy, and amenities.
- These homes command premium rents, attract longer-term tenants, and boast lower vacancy rates.
- Investor appetite is rebounding as SFR/BTR demonstrates superior fundamentals.
- Construction activity is accelerating—BFR starts could reach 180,000 units by 2025.
When the American Dream Meets Affordability Reality
Homeownership is increasingly out of reach for young adults. It’s now 45–50% more expensive to buy and maintain a starter home than to rent a comparable single-family property. Rising interest rates and post-pandemic housing inflation have only made this worse.
Between 2019 and 2024, the income needed to qualify for a mortgage on a starter home surged from $49,824 to $86,880, while typical buyer income has only modestly risen—from $52,525 to $59,059. The result? More Americans are turning to rental alternatives that offer home-like space without the financial friction and high mortgage burden of ownership.
Why Investors Are All-In on Build-to-Rent
The Build-to-Rent (BTR) and Single-Family Rental (SFR) sectors are rapidly evolving from niche experiments into a mainstream investment class. While only about 2% of all SFR housing stock today is purpose-built, this number is climbing quickly as demand surges.
Originally dominated by mom-and-pop landlords, the SFR space saw institutional capital flow in after the 2008 housing crisis. Now, purpose-built BTR communities—sometimes called “horizontal apartments”—are being constructed nationwide, offering scalable, managed housing with lower vacancy, faster lease-up times, and longer average tenancies than conventional multifamily properties.
The appeal of BTR’s is clear. Experts at Origin Investments report that BTR homes are cheaper to build per-square-foot, faster to complete (12–15 months vs. 22–24 for typical multifamily), and flexible in design—ranging from urban townhomes to sprawling suburban detached homes. Developers are building them in walkable master-planned settings to encourage neighborly interaction, appealing to a new generation of renters.
Resilience in a Changing Market
Following the Federal Reserve’s aggressive rate hike campaign in 2022, residential transaction volumes cratered. But while sectors like office and multifamily struggled, SFR and BTR proved remarkably resilient. Fueled by the return of institutional capital, tour and offer activity has climbed, and risk-adjusted returns and “location, location, location” are back in focus.
These trends continued into 2024 and 2025, as investors increasingly favored low-density residential formats. With multifamily yields compressed and uncertainty still looming, BTR presents a clearer path to long-term growth, particularly in markets across the Sunbelt where construction costs remain favorable and demand remains high.
Who’s Renting These Homes?
While Millennials are the poster children for the BTR boom, they’re far from the only demographic driving demand. According to MetLife Investment Management, 11 million new U.S. households will form over the next decade—including:
- Young families seeking space and good schools,
- Remote workers who need more square footage, and
- Boomers and empty nesters downsizing to rental living.
These groups are looking for two- to four-bedroom homes with private entries, backyards, garages, and room to breathe—features that traditional apartments simply can’t offer. And BTR is delivering.
BTR homes are often 200–600 square feet larger than traditional apartments, commonly include attached garages and fenced-in yards, and are increasingly designed with amenities rivaling luxury multifamily: pools, clubhouses, coworking lounges, and professional management.
What It Means for the Market
BTR is not just a workaround for affordability; it’s an evolution of how and where people want to live. It’s also filling a major gap in the housing market: missing middle housing—units that fall between high-rise apartments and detached homes but aren’t readily available.
With construction starts forecast to reach 180,000 units by 2025, BTR is quickly becoming a primary solution to the nationwide rental housing shortage. And with rising mortgage costs, fewer single-family starts, and lasting demographic shifts, the trend is unlikely to reverse.
The bottom line is Millennials aren’t abandoning the American Dream—they’re redefining it to match a new financial reality. In the process, they’re fueling a wave of innovation that’s changing how housing is built, rented, and invested in.
Build-to-Rent is no longer just a stopgap or a trend. It’s a full-fledged asset class—and a practical, scalable response to one of the nation’s most persistent economic challenges: affordable, livable housing for a changing generation.
