Suburban Rent Surge: Millennials Are Fueling a New Multifamily Trend

Admin
Jul 7
3 min read

Vibrant suburbs once dominated by homeowners are now buzzing with renters, with families, young professionals, and downsizing Boomers all calling them home. This is the new reality of suburban housing in 2025.

As affordability constraints and lifestyle shifts reshape preferences, rental demand outside city centers is surging. For investors, this trend represents a powerful mix of rent growth, stability, and expansion potential.

In this article, we’ll explore data on rising suburban rents, demographic drivers behind the shift, key markets leading growth, and why syndications focusing on suburban multifamily make compelling opportunities today.

The Rise in Suburban Renting

Recent data underscores a seismic shift: “Americans priced out of buying homes in the suburbs turn to renting,” with rental stock increasing by up to 50% in Austin’s surrounding counties between 2018 and 2023. Similarly, it is reported that 203 suburbs in top 20 metros now have more renters than homeowners, with suburban renter households growing by 231,000 since 2018. Notably, in suburbs of Dallas, Boston, Minneapolis, and Baltimore, renters are outpacing homeowners, which is an unmistakable structural transformation.

As supply grows, the next question is who’s fueling it and why that is good news for investors.

Millennials & High‑Income Renters: Driving Demand

Understanding the renter profile is essential for syndicators and investors alike.

Millennials, in particular, are a key force. Only 47% own homes, compared to 65% of Gen Xers and 74% of Boomers, and many are priced out of ownership due to down payment hurdles. A survey also found that 72% of millennials live in apartments, with half actively seeking more space in the suburbs; suburban safety and room now outweigh urban city-life priorities. Additionally, Census data shows major millennial outflows from metro cores to suburbs in metros like Houston, Denver, and Dallas.

This renter resettlement isn’t limited to millennials. High-income households and remote workers also seek suburban rentals for space, commute flexibility, and better family environments.

With mortgage rates near 7%, many renters choose financial prudence over ownership, fueling suburban demand.

With a clear demand profile, the focus shifts to where this trend is strongest and why syndicators should pay attention.

Target Markets & Suburban Hotspots

Identifying markets in the sweet spot of growth and affordability is key for strategy.

Texas stands out: the Austin corridor saw rental housing inventory rise up to 50% in suburbs like Bastrop and Williamson Counties . Nashville and Denver show similar gains, while East Coast suburbs in Boston and Washington, D.C. have added rentals through tenure conversion.

Other attractive markets include suburban Chicago, Boston, Orlando, and Tampa, where housing affordability and renter-friendly supply dynamics are reshaping investor interest. In many of these metros, suburban rent growth now outpaces urban cores, implying sustained visitor demand for well-positioned properties.

Why Suburban Multifamily Syndications Make Sense

For syndicators, suburban multifamily offers a compelling value proposition in 2025.

● Strong Rent Growth with Stability: Suburban rent inflation is fueled by supply-demand imbalance. Reduced construction and renter influx supports consistent rent growth and lower volatility.

● Demographic Tailwinds: Millennials, high earners, and remote workers prefer suburban life, driving longer-term leases and reduced turnover.

● Scaled Deal Flow: Suburban sites often allow larger footprints and cohesive developments, which is ideal for syndicators managing 100+ unit portfolios.

● Financing Advantage: Suburban multifamily still attracts attractive debt structures and insurance rates compared to urban high-rises.

● Exit Flexibility: Suburban assets allow exits to REITs, pension funds, or build-to-rent strategies, matching investor return goals across cycles.

While this model shows promise, it’s important to review key execution considerations.

Key Considerations & Execution Strategy

Even strong trends require disciplined execution. Here are some things you should remember:

● Location & Accessibility: Proximity to schools, transit corridors, and employment nodes remains essential, even in suburbs.

● Product Positioning: Offering unit types that cater to millennials and families, like 2-3 bedroom units with amenities, home-office space, and community feel.

● Professional Management: Effective leasing and retention hinge on quality property management attuned to suburban tenant expectations.

● Regulatory Review: Zoning and suburban municipal regulations must be managed early in underwriting.

Conclusion

The suburban rental surge is a strategic shift in housing preference. With millennials, high-income households, and remote workers driving demand, well-positioned suburban multifamily properties offer strong growth, stability, and scale.

Syndicators who act now, aligning with suburban demographic trends and lending dynamics, can capture long-term income and value upside.

At Makaan Investment Group, we’re tailoring syndication opportunities to the suburban migration wave, leveraging data-driven underwriting, selective market targeting, and alignment with lifestyle-driven demand.