Why Midwest Renters are Less Likely to Pursue Homeownership

Key Points

• Midwest renters report the strongest preference for renting among all U.S. regions, according to the Federal Reserve Bank of New York's February 2026 housing survey.

• The findings are notable because the Midwest remains one of the nation's most affordable regions for homeownership.

• The share of households expecting to buy their next home declined year over year, signaling that renting is increasingly a long-term lifestyle choice.

• Preference-driven rental demand may provide greater stability for multifamily owners and investors.

 

The latest Survey of Consumer Expectations Housing Survey from the Federal Reserve Bank of New York highlights an unexpected trend across the U.S. housing market. Nearly 13% of Midwest renters reported a preference for renting, more than three percentage points above the national average. While the Midwest continues to offer some of the most attainable opportunities for homeownership, renters in the region are more likely to prefer renting than elsewhere in the country.

The findings suggest that affordability alone may no longer be the primary factor shaping housing decisions in the Midwest. Instead, many households in the region appear to be renting by choice.

What the Data Shows

The New York Fed’s survey results also reveal that renters’ preferences vary significantly across the country.

In many coastal markets, elevated home prices and limited housing inventory make renting the most practical option for a large segment of households. However, the Midwest has a different dynamic. Despite comparatively accessible homeownership conditions, renters in the region have continued to show the strongest preference for renting. These findings suggest that Midwest lifestyle renters may be a growing component of the region’s long-term rental demand.

The survey’s results also found that among households expecting to move within the next three years, the probability of buying rather than renting their next residence fell to 52.9%, down 2.5 percentage points from the prior year and the lowest reading since this question was introduced in 2014.

This shift in household expectations suggests that renting is increasingly being viewed as a long-term housing solution rather than a temporary step toward ownership.

How Major Markets Are Responding

For multifamily owners and investors, insight into whether renters remain in apartments by necessity or choice is critical to evaluating market dynamics.

Demand driven primarily by affordability constraints can shift quickly when mortgage rates, home prices, or financing conditions change. By contrast, renters who value flexibility, mobility, reduced maintenance responsibilities, and lifestyle convenience tend to remain in the rental market even when purchasing becomes more financially achievable.

Many Midwest metros appear to have benefited from this preference-based demand. The region's affordability, stable employment growth, and balanced multifamily supply-demand fundamentals have helped to sustain occupancy and support long-term rental demand. Characteristics like these align with findings from Arbor Realty Trust and Chandan Economics' Top Markets for Multifamily Investment Report Spring 2026, which identified several Midwest markets as attractive for investment due to their favorable fundamentals and resilient renter bases.

The Takeaway

These shifting consumer preferences have important implications for multifamily operators and investors evaluating future demand. For investors, the composition of rental demand can be just as important as its overall size. Markets where renters choose rental housing rather than defaulting to it often demonstrate stronger occupancy stability, lower turnover, and more durable long-term performance. The New York Fed’s findings indicate that the Midwest’s rental market is supported by structural demand even though it also has accessible pathways to homeownership, making it a compelling region for multifamily investment.

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