Financial headwinds and generational shifts are driving a growing cohort of “Lifestyle Renters” willing to pay premium rents for the neighborhoods and amenities they desire—here is how to identify where they live and what they look for.
The US multifamily market presents compelling investment opportunities with stability and proven resiliency. While rent growth has moderated within some markets and subsectors, a long-term, generational shift is underway, driving demand for high-quality rental housing and revealing an opportunity for outsized growth in this segment.
Financial headwinds for individual home buyers have sharply worsened in recent years, and younger generations have adapted their spending and saving habits to cope with these challenges. These shifts have bolstered an increase in a specific renter cohort coming to be known as “lifestyle renters.”
While lifestyle renters can afford premium rents, the cost of homeownership in their desired neighborhoods remains either out of reach or misaligned with their priorities. With soaring housing prices and prolonged, elevated mortgage rates, well-amenitized apartment communities present an attractive alternative for these renters, who seek a comfortable and convenient lifestyle. Investing in apartment communities that cater to this strengthening and expanding demographic presents an opportunity for stable, outsized growth.
DEFINING THE LIFESTYLE RENTER
Thetailwind to high-quality, well-located multifamily housing is strong, driven forward by lifestyle renters. While factors impacting the younger generations are driving demand, this cohort is diverse and not tied to a single market segment. There are several defining characteristics of lifestyle renters that are key to understanding the demographic:
- Rent/Income Ratios are Low: These renters have strong incomes and can afford to pay above market rents in their preferred markets.
- Ownership is Financially Out of Reach: Although these renters have the income to support premium rents, the cost of owning a property in their preferred markets remains beyond reach or fails to align with their lifestyle priorities.
- Desirable Neighborhoods: Lifestyle renters seek out specific neighborhood amenities, including good schools, access to high end retail, and an enriched cultural and community life.
These factors produce a renter base that is less price-sensitive, upwardly mobile, and resilient in downturns—a highly attractive demographic for owners.
MOUNTING FINANCIAL HEADWINDS
A key contributor to the growth of lifestyle renters is the financial challenge of buying a home. Headwinds to homeownership have become more challenging for new market entrants in recent years, and younger generations have made behavioral changes to adapt to these challenges.
For example, Millennials were forecasted to be prepared for ownership as they’re now covering the 29–44 age period, but many members of this generation still face significant financial challenges in their pursuit of homeownership.
These challenges are largely driven by Millennial-borne debt (especially student debt), which continues to hinder their ability to save for a down payment. As recently as 2021, 36% of Millennials reported that student debt was a significant obstacle to saving for a down payment,[1] with most having entered their 30s with more than twenty times of the student debt held by Baby Boomers at that same age.[2]
At the same time, higher interest rates have created “stickier” owners, leading to a lack of available home inventory available to the group that would otherwise be able to afford a down payment. For every percentage point that market mortgage rates exceed the origination interest rate, the probability of sale is decreased by 18.1%.
This mortgage rate lock-in led to a 45% reduction in home sales with fixed-rate mortgages in Q2 2024 and prevented 1.72 million sales between Q2 2022 and Q2 2024. A study by the FHFA found that this lock-in related supply reduction resulted in a 7% increase in home prices, which was only partially offset by the decrease caused by higher mortgage rates.[3]
In tandem with for-sale inventory drying up and rising in price, the overall cost of homeownership has also risen sharply. Thirty-year mortgage rates jumped from an all-time low of 2.66% in early 2021 to 6.74% in July 2025, significantly increasing monthly payments on homes that are already far pricier than they were in 2020.[4]
Average annual maintenance costs on single-family homes also rose 8% from 2022 to 2023, while insurance premiums and property taxes also climbed on the back of natural disaster losses and higher home valuations.[5]
This confluence of factors has made saving for a home, buying a home, and related maintenance costs increasingly difficult for a large group of Americans. As home ownership has moved further out of reach, many Americans are adjusting their priorities. First-time buyers were a median age of 38 in 2024—up significantly from 31 in 2013 and 29 in 1981.[6] In the meantime, younger cohorts are channeling savings into the markets early and spending on travel, everyday luxuries (such as streaming subscriptions, boutique fitness, and frequent dining out), and finally, upscale apartments that offer convenience and community.
A GROWING & IMPROVING MARKET SEGMENT
As financial headwinds have delayed major milestones and pushed homeownership further out of reach, forcing a redefinition of the “American Dream” that doesn’t include homeownership, the population of lifestyle renters has grown in kind.
The demographics of the US renter pool have improved at a faster pace than the general population.
From 2019 to 2023, renter households making more than $100K grew by an average of 52% across the largest US markets, compared to 32% growth for the overall population. This pattern exists across smaller MSAs as well.
Renter households making $100K+ now make up an average of 27% of the renter population, compared to 19% in 2019.[7]
INVESTING IN LIFESTYLE RENTER COMMUNITIES
The momentum behind lifestyle renting creates a compelling thesis to invest in markets and assets catering to them specifically.
Identifying where lifestyle renters live and what they value requires more than broad market data and requires insight into submarket and neighborhood-level information. For example, to track lifestyle renter markets, the Dermot Company has developed a proprietary platform—Dermot Acquisition Intelligence—that integrates demographic, economic, and housing data to identify locations where lifestyle renters are both concentrated and underserved. This is achieved through generating a custom set of metrics, including several unavailable in other databases, and using various levels of analysis, the platform generates a physical and financial snapshot of potential lifestyle renter-suited properties—ultimately informing investors on where and how to deploy their multifamily capital.
Key investment criteria include a set of guiding questions used to evaluate markets, submarkets, and neighborhoods where lifestyle renters are most likely to live, such as:
- Where is the renter base sizable, and what income bands dominate?
- How much rent do high-income households pay—and what headroom remains?
- Do local amenities align with lifestyle renter preferences?
- Does renting still make economic sense versus ownership?
- Are upcoming deliveries a potential headwind to rent growth?
By layering these questions with location-specific data, investors can isolate highly specific locations where demand from lifestyle renters is expected to be both strong and sustainable.
For example, Dermot was able to utilize its tool to find a specific property in the Sun Belt—the Quaye at Wellington in South Florida. The data revealed a high-income, highly desirable submarket well-suited to family-oriented lifestyle renters. And in dense urban settings like Manhattan’s Financial District, it supported acquisitions like 20 Exchange, where affordability gaps to ownership remain wide, but access to relevant lifestyle amenities continues to attract high-income renters.
The same methodology is now being used to take a closer look at lifestyle renters across Dermot’s markets up and down the East Coast, including New York City, where high-earning households consistently choose high-quality rental housing. The following case study explores a selection of these tailored metrics, and what it reveals about the demand from this cohort across the city.
LIFESTYLE RENTERS BY THE NUMBERS: A MARKET CASE STUDY
The cost of living in New York City is famously high, but in certain pockets of Manhattan and Brooklyn, the cost of higher-end rents in lifestyle renter-approved neighborhoods is very much within reach for the demographic.
Investors can focus in on these pockets through higher-income-renter-specific income data and choice desirability data.
As shown in Exhibit 4, looking at median renter household income data provides a more targeted snapshot of where wealthier renters are located.[8]
Still, household incomes alone don’t tell the full story. Examining rent-to-income ratios specific to lifestyle renters reveals where high earners live at relatively low cost.
This highlights micro markets with strong potential for outsized rent growth. Exhibit 5 shows ten neighborhoods with the lowest rent/income ratios, with rent being defined as class A/B average rents, and income as third-quartile renter household incomes, creating a proxy for the target renter demographic.
Lifestyle renters don’t live in a location for the rent alone, they also look for conveniences, neighborhood amenities, and cultural draws. Properties zoned for highly ranked elementary schools, within a ten-minute walk to a Whole Foods, and with farmers markets and craft coffee shops around the corner are the most ideal.
Areas that lack walkability, greenspace, and a robust restaurant scene are more likely to fall short for the demographic. Property-specific metrics to quantify the presence of these amenities are available through third-party providers such as Walkscore, Greatschools, and Google Maps. The neighborhoods shown in Exhibits 4 and 5 align well with these desired factors.
These results might state the obvious to anyone who lives in New York City, but to investors less familiar with the market it allows for an objective, data-driven thesis around a location.
SHIFTING PRIORITIES
Economic trends and shifting generational priorities are creating a strong window of opportunity to serve Lifestyle Renters through investments in high-quality rental housing. Rising housing prices and prolonged high mortgage rates have pushed homeownership out of reach for many high-income individuals, even those who could traditionally afford to buy. At the same time, younger generations are redefining the American Dream, prioritizing experiences and flexibility over homeownership and choosing rental communities that offer upscale amenities and vibrant, desirable neighborhoods. Taking a data-driven approach through custom-built metrics helps locate target renters quickly and with accuracy, allowing investors to move with conviction to capture long-term housing trends.
MORE FROM SUMMIT #19
PLATFORM SPONSOR
ASSOCIATE SPONSOR
Note from the Editor: Issue #19
Mid-Year Pulse: Global Investors on the Economy, Energy, and Housing
Benjamin van Loon | AFIRE
Bend, Not Break: Investing in Real Estate Amid Economic Uncertainty
John Murray + François Trausch + Russell Gannaway + Kirill Zavodov | PIMCO
Test Of Time: How US Real Estate Withstands an Uncertain Investment Market
Riaz Cassum | JLL
Oh Canada: Why International Investors Might Want a Second Look at Canadian Real Estate Markets
Amy Erixon + Long Tang + Daniel Goldberg + Marie-France Benoit | Avison Young
Beyond Oil: Why Gulf Family Offices Are Doubling Down on US Logistics, Data, and Housing
Abbas Hashmi | Saudi Family Holdings
South of the Border: Higher Yields and Growth in Mexican Industrial
Shaun Libou | Raymond James
Migration Myth: NIMBYism and Why Coastal Movers Aren’t Affecting Sunbelt Housing Supply
Donal Warde | Consultant + Ron Bekkerman | Constellation Data Labs
Machine Center: The AI-Driven Transformation of Data Center Investment
Sam Chandan | Chen Institute for Global Real Estate, NYU Stern School of Business
AI in Commercial Real Estate: A Practical Guide for Industry Leaders
Armel Traore Dit Nignan + Shaarvani Kavula | Principal Real Estate
Artificial Control: Are You Ready for AI Management and Oversight?
Marie-Noelle Brisson + Michael Savoie | CyberReady, LLC
Capitalizing on Dynamics: Demographic Mega-Trends Impacting CRE
Stewart Rubin | New York Life Real Estate Investors
Mid-Cap Assets: An Under-Examined Segment in CRE
Asaf Rosenheim | Profimex
The Lifestyle Renter: A Growing Opportunity for Strategic Investment in High-Quality Apartment Communities
Hannah Waldman | The Dermot Company
The Climate Is Speaking: CRE Underwriting for a Future That’s Listening
Ines Diez + Thomas Stanchak | Stoneweg
+ EDITOR’S NOTE
+ ALL ARTICLES
+ PAST ISSUES
+ LEADERSHIP
+ POLICIES
+ GUIDELINES
+ MEDIA KIT
+ CONTACT
NOTES
1. Legal & General US Housing Study, “US Millennials and Home Ownership – A Distant Dream for Most: Part 5” (2021)
2. Federal Reserve Bank of St. Louis, “Assets and Debt across Generations, (May 24, 2024)
3. Batzer, Ross M.; Coste, Jonah R.; Doerner, William M.; Seiler, Michael J., “The Lock-In Effect of Rising Mortgage Rates,” Federal Housing Finance Agency (August 2024)
4. Freddie Mac, “Current Mortgage Rates Data Since 1971,” (July 24, 2025)
5. Erb, Jack, “Annual Home Maintenance Costs Continue to Rise, Reaching New High of $6,663 Amidst Tight Housing Market,” Thumbtack (January 29, 2024)
6. National Association of REALTORS®, “Profile of Home Buyers and Sellers,” (November 4, 2024)
7. US Census Bureau
8. US Census Bureau, American Community Survey 5-Year Data 2023, “B25119 – Median Household Income in the Past 12 Months (in 2023 Inflation-Adjusted Dollars) by Tenure,” (December 12, 2024); US Census Bureau, American Community Survey 5-Year Data 2023, IPUMS, (December 12, 2024);
ABOUT THE AUTHOR
Hannah Waldman is Vice President of Investments for the Dermot Company.
PLATFORM SPONSOR |
YARDI INVESTMENT SUITE
For over two decades, Yardi has developed connected investment management solutions tailored for global real estate investors. Supporting trillions in AUM across a diverse client base, including institutional funds, partnerships, and emerging managers, Yardi enables full visibility and control across the entire investment lifecycle.
From sourcing acquisitions and raising capital to accounting, debt management, performance benchmarking, and investor reporting, Yardi helps streamline complex processes into one integrated platform. Investors gain secure, self-service access to reports, documents, and investment positions, while investment firms benefit from improved collaboration, faster distributions, and scalable operations.
Built on 40 years of real estate technology leadership, Yardi’s end-to-end capabilities empower commercial real estate firms to manage with confidence, transparency, and efficiency.
ASSOCIATE SPONSOR |
HAWTHORNE RESIDENTIAL PARTNERS
Hawthorne Residential Partners is a vertically integrated owner, operator, and developer of Sunbelt Multifamily and Build-to- Rent product.
The firm has acquired or developed 24K+ units since inception and currently manages 64K+ units across eight states. Hawthorne partners with institutions on a single-asset and programmatic basis.