Lease Renewals Surge as Renters Avoid Housing Market

Lease renewals hit record highs as renters stay put amid rising home costs and economic uncertainty.

May 23, 2025

Lease renewals hit record highs as renters shy away from homeownership amid high mortgage rates and economic volatility.
Turnover rates drop below 35% across major multifamily portfolios, with some REITs reporting historic lows.
Stability benefits landlords with lower operating costs and high occupancy, despite softening consumer confidence and fears of recession.

Key Takeaways

A Staying Trend

According to Bisnow, lease renewals are rising as renters hold onto their leases longer than ever. In the first quarter of 2025, only 30%–35% of tenants chose not to renew, according to Piper Sandler’s Alex Goldfarb.

Equity Residential reported a turnover rate of just 7.9%. Camden Property Trust and Essex Property Trust saw rates of 31% and 35%, both well below their long-term averages.

What’s Keeping Renters in Place

High mortgage rates and limited home inventory are pushing renters to stay put. A Gallup survey shows less than one-third plan to buy a home in the next five years.

Affordability remains the biggest hurdle. Down payments and interest rates are keeping many out of the market.

“With today’s uncertainty, many renters prefer the stability of a lease,” said George Ratiu of the National Apartment Association.

Landlord Windfall

At The Bainbridge Cos., lease renewals are occurring at an unusually high rate, with around two-thirds of tenants choosing to stay. “That’s extremely high,” said CSO Marcie Williams. “In 30 years, I’ve rarely seen this.”

Lower turnover saves landlords money. Avoiding vacancy loss, unit repairs, and marketing can reduce costs by $750 to $1,800 per apartment.

Supply Slowing, Competition Growing

New apartment deliveries dropped to 116,100 units in Q1 2025, down from 153,000 in Q4 2024.

Still, competition is fierce for tenants in lease-up. In Sun Belt cities like Jacksonville and Charlotte, landlords are offering up to two months free rent and gift cards.

Looking Ahead

Turnover usually spikes in spring and summer. But this year, analysts expect lease renewals to remain strong and overall retention high, even as new units hit the market.

According to Goldfarb, the second wave of new supply isn’t likely to change that.

With fewer move-outs, landlords may test modest rent increases. “The mental cost of moving,” he said, “often outweighs the financial one.”