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So far in 2018, the Fed has raised interest rates and there has been a decisive housing shortage, making it difficult for first time home buyers to make the jump into buying from renting. It appears as the year goes on, this trend will only become more prevalent.

A new tax law just made it more expensive to own a house in a place where prices are high, such as big cities or popular suburbs. For a lot of perspective buyers, this new law combined with rising home prices and interest rates means that continuing to rent makes more financial sense than buying. This is especially true since the prices of homes are rising faster than salaries and inflation, so it is getting harder and harder for new people to enter the market. Another contributor is the general uncertainty surrounding the market, like how much interest rates are going to rise or if new housing options will pop-up, coupled with decreased incentives to buy over renting.

In addition to general market woes, the new generation entering the market is burdened with more debt than previous generations, thanks to student loans and high rent rates. This makes them less prepared to make the down payments necessary to purchase a house, and even if they were able to a small increase in mortgage rates could easily make the house unaffordable for them. The moral of the story is, as long as rates and prices remain high, the ratio of renters to buyers will continue to tip in the favor of renters.

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