The 30-year mortgage rate is now above 7%. Will that trigger boom times for single-family rentals and apartments? I wouldn’t bank on it.
While it makes sense intuitively, there’s no real precedent for it historically. Look up the biggest years for rent growth, and what do you find? Surprise: It’s not what you think. Rents tend to pop most in periods when homes are selling.
More recently, despite many predictions otherwise, the slowdown in home sales has correlated with a material cooling in rent growth for both apartments and for single-family rentals. Rents and home sales are more correlated than most analysts assume.
Why is that? Because the U.S. economy performs better when people are moving around and buying homes. When you buy a house, you’re more likely to hire contractors and shop at home improvement stores. That boosts the economy, jobs and household formation for all housing types. So, for rentals, you may see more move-outs to home purchase … but you usually backfill those vacancies faster — and at a higher rent.
On the flip side, when home sales are slow (like now), we see strong retention but slowed new leasing traffic, so available units tend to sit vacant longer.
This is why I always tell apartment, SFR and BTR investors: Ignore the hype. You should be CHEERING for a stronger for-sale housing market.
So do higher rates and potentially softer sales spell doom for rental housing? No. A couple thoughts:
a) Reduced homebuying does NOT create more renters, but it does likely keep renters renting longer. Not necessarily at the same rental, but still in the rental sector. The way to think about this phenomenon is that it gives rental housing a high floor — not a high ceiling. Meaning: Slow homebuying should keep occupancy rates (and renewal rent growth) in solid shape, protecting rent rolls and values from the type of volatility we see in the homebuying market.
b) We still could very likely see stronger rent growth in 2027, but if we do, mortgage rates and home sales (keeping rental occupancy higher) would only be one of the factors. The bigger factor is supply. We’re coming off the biggest supply wave in a generation for apartments specifically, as well as the newly emerging build-to-rent SFR sector. That’s the primary headwind for rents in recent years, and as supply wanes (assuming the job market holds up), we should see rents rebound somewhat.
The rent rebound — in my view — would be more sizable if homebuying (and therefore: household formation) picks up, which seems less and less likely.
Regardless, here’s the bottom line: Cheer for a stronger for-sale housing market.
Jay Parsons is a rental housing economist, advisor and speaker. He has advised numerous multifamily and single-family rental housing stakeholders – from institutional investors, REITs, regional operators, lenders, regulators and government agencies.
Jay hosts a weekly podcast called The Rent Roll with Jay Parsons, which in 2025 ranked among Spotify’s top 1% for most shared shows and in the 2% for listening time and for growth. Additionally, the readers of CRE Daily ranked The Rent Roll as the No. 1 housing podcast and No. 3 in all commercial real estate. In addition to independent speaking engagements and consulting, Jay serves as an Economics Advisor to JPI. Previously, Jay was the Chief Economist at RealPage.
More than 150,000 people follow Jay’s content across LinkedIn or X/Twitter. Favikon, a social media analytics firm, ranked Jay as the No. 3 voice on real estate globally, noting: “He keeps it simple … The tone is conversational and candid, which pulls in pros who want clarity without agenda. Posts read like field notes, with context, caveats, and the occasional dry humor. The mix of original analysis and open debate makes him feel both authoritative and approachable.”
In early 2026, commercial real estate trade publication The Real Deal named Jay one of its “100 Real Estate Titans of the Year.” Another trade media outlet, GlobeSt, in 2023 named Jay one of its “Influencers in Multifamily Real Estate.”
Jay has been cited in The Wall Street Journal, Bloomberg, The Financial Times, The Economist, The New York Times, The Washington Post, NBC News, and he has appeared on CNBC and BloombergTV. His commentaries have been published by Barron’s, the Pension Real Estate Association, the Mortgage Bankers Association and American Banker, among others.
Jay also serves on the Board of Advisors for Apartment Life, a faith-based non-profit serving apartment residents and operators. He is a graduate of the University of Maryland currently living in the Dallas area with his wife and their five children.
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