**Restrained Homebuying Continues to Impact Multifamily and Retail Sectors**
It’s no secret that fewer Americans are purchasing homes these days. High mortgage interest rates and consistently rising home prices are key drivers behind this trend.
According to John Chang, Vice President at Marcus & Millichap, only about 28% of U.S. households currently qualify for a mortgage on a median-priced home based on Freddie Mac income-to-loan ratios. Beyond affordability, many potential buyers are also hesitant due to the extra costs associated with purchasing a home.
This decline in homebuying activity is having a significant ripple effect, particularly on the multifamily and retail real estate sectors.
**Multifamily Sector Sees Boost in Renter Retention**
The growing gap in housing affordability, combined with stricter mortgage lending standards, is translating to stronger renter retention rates in the multifamily sector.
“The current renewal rate stands at 55%, well above the long-term average,” said Chang. This elevated retention is supporting continued demand for apartment rentals and sustained net absorption.
With both single-family and multifamily home construction activity tapering off, home prices are expected to keep rising, further fueling demand for rental housing in the coming years.
**Retail Sector Feels an Indirect Impact**
The effects of restrained homebuying extend into the retail sector as well. Approximately 7% of total retail sales come from home-related products — including goods sold by retailers like Home Depot, Lowe’s, as well as lighting and furniture stores. General merchandise retailers such as Target and Walmart also contribute, especially through sales of small home appliances and décor.
Because home sales correlate directly with sales of these products, store revenues in this category will likely remain limited until mortgage rates come down. Despite these constraints, vacancy rates in lifestyle and power centers held steady at 4.7% in Q3 2025 — a figure comparable to that of grocery-anchored, unanchored, and single-tenant retail properties.
Looking ahead, Chang predicted that elevated housing prices and restrictive ownership conditions will remain a reality. This continued dynamic is expected to support both stable demand for rental housing and relatively steady home-related retail sales — at least until a marked drop in interest rates makes homeownership more accessible.
