Falling Mortgage Rates Narrow the Rent vs. Buy Divide

GlobeSt reports that declining mortgage rates are reducing the affordability gap between renting and owning. Even modest rate compression improves monthly payment math for marginal homebuyers.

For multifamily owners, the implication is subtle but real. Texas metros like Austin and Dallas have benefited from constrained home affordability, which supported rental demand despite heavy apartment deliveries. If ownership becomes incrementally more attainable, renter retention dynamics could soften at the margin.

This is not an immediate demand shock. Housing inventory remains tight in many submarkets. But the direction matters: multifamily demand is sensitive to financing costs on the for-sale side.

Investor takeaway: Underwrite rent growth conservatively in high-delivery markets; improved home affordability could cap near-term upside in Class A lease-ups.