Single-Family Renters Are Narrowing the Income Gap With Homeowners

Subscribe

The single-family rental (SFR) market occupies a dynamic midpoint in the US housing ecosystem. These rentals offer many of the same features as owner-occupied single-family homes, including ample living space, quiet residential settings, and access to neighborhood schools. Yet the households renting those homes have historically had substantially lower incomes than the households owning them.

That income gap, however, is narrowing. According to the American Community Survey, average single-family renter household income reached 60.9% of single-family owner household income in 2024. That compares with 53.9% in 2005 and 58.5% in 2019.

The narrowing income gap raises a critical question about the role of SFRs in today’s housing market: are single-family rentals increasingly serving the kinds of households that historically would have become homeowners? The income data provide some support for that interpretation, particularly when examining newer homes. They also reveal a longer-running change in the composition of the single-family renter population.

Using IPUMS USA American Community Survey data, this analysis compares household incomes in renter-occupied and owner-occupied attached and detached single-family homes from 2005 through 2024, excluding 2020. Estimates use household weights. Comparisons of dollar amounts over time are adjusted to 2024 purchasing power.

Renters Are Gaining Ground

In 2024, average household income among single-family renters was approximately $83,900, compared with $137,800 among single-family owners. Renters still earned considerably less, but their average income was equivalent to roughly 61 cents for every dollar earned by owner households, up from approximately 54 cents in 2005.

The convergence extends beyond averages, which can be influenced by changes at the top of the income distribution. Median SFR household income reached $64,000 in 2024, compared with $103,400 among single-family owners. The renter-to-owner median income ratio increased from 53.3% in 2005 to 61.9% in 2024.

After accounting for inflation, median SFR household income increased 24.5% over that period. The corresponding increase among single-family owners was 7.3%. Renters’ income gains therefore represent an improvement in purchasing power alongside their stronger relative position.

Still, the distinction between a narrowing percentage gap and a narrowing dollar gap is important. Measured in 2024 dollars, the difference in average household income declined only modestly, from approximately $57,000 in 2005 to $54,000 in 2024. Single-family renters have gained ground, but considerable financial distance remains between the two populations.

The timing also deserves attention. Much of the convergence predates the pandemic. The recent increase builds on a trend already visible during the preceding decade, suggesting that today’s SFR household profile reflects more than the housing conditions of the past few years.

Newer Rentals Serve Higher-Income Households

The income profile becomes more striking when narrowing the analysis to recently constructed homes.

Among SFR households occupying homes built between 2020 and 2024, median household income was $88,000 in 2024. That was 37.5% higher than the $64,000 median across SFR households overall. Average income in these newer rentals exceeded $106,000.

Newer owner-occupied homes also served higher-income households. Their median household income was $133,000, compared with $103,400 among single-family owners overall. The relationship between newer housing and higher household income is therefore evident in both tenures.

For the rental market, the distinction is meaningful. The typical household in a newer SFR earned substantially more than the typical household across the broader SFR stock. These homes are serving a segment with a different income profile, making the economics of renting versus buying especially relevant to understanding their occupants.

Construction timing, however, does not identify whether a property was built specifically for rental use. These findings describe newer single-family rentals, which may include both purpose-built rentals and homes originally constructed for ownership.

Who Rents Is Part of the Story

Recent movers provide another way to examine the comparison. Among households that moved into their current homes within the preceding 12 months, median income was $69,000 for single-family renters and $112,000 for single-family owners. The renter figure was equivalent to 61.6% of the owner figure, close to the ratio across all single-family households.

Incoming renters have higher incomes than the broader SFR population, but incoming owners do as well. The comparison does not reveal a substantially different relative income profile among recent movers.

Differences in household characteristics also account for part of the broader income gap. A supporting analysis holding broad age, household-size, education, and regional distributions fixed still finds convergence between renters and owners, although the increase is smaller. Changes in who makes up each population are part of the observed narrowing.

That changing household mix is economically revealing. However, these surveys do not establish whether renters intended to buy, could qualify for a mortgage, or would have purchased a home under different circumstances. They only show which households occupy each type of housing and how their incomes compare.

The Financial Hurdles to Ownership

The narrowing income gap also needs to be considered alongside the financial hurdles to buying a home. According to the Atlanta Fed’s Home Ownership Affordability Monitor, owning the median-priced existing home required 43.9% of the median household’s income in August 2026. Keeping those estimated costs within its 30% affordability benchmark required annual income of approximately $126,800, compared with actual median household income of $86,700. The calculation also assumes a 10% down payment, equivalent to $40,600 on the benchmark home, before closing costs.

Credit profiles provide another indication of the financial position of households successfully entering homeownership. New York Fed research finds that the average credit score among first-time mortgage borrowers increased from 670 in 2000 to 718 in 2019 and 734 in 2024. Those figures describe the borrowers obtaining mortgages, rather than a minimum score required for approval. They nevertheless reinforce the distinction between earning enough to support a household and being positioned to finance a home purchase.

Bottom Line

Single-family renters are narrowing the income gap with homeowners, and newer rental homes serve a particularly high-income segment. Much of that convergence predates the pandemic, suggesting that today’s SFR household profile reflects a longer-running shift rather than just a response to recent housing-market pressures.

Higher incomes, however, do not necessarily put homeownership within reach. Down payment savings, credit profiles, and financing costs remain separate hurdles. Our findings are consistent with single-family rentals serving some households that historically would have become homeowners, although they cannot establish how many. For those households, renting can provide access to the home they want before they can afford to own it.