Renters Are the Largest Untapped Source of First-Time Buyers: What the Data Shows

For many real estate agents, rentals still feel transactional. But the data tells a very different story. If you are looking to grow your buyer pipeline over the next 12 to 24 months, renters are not a side business, they are the starting point.

The Renter-to-Buyer Pipeline Is Bigger Than Most Agents Realize

Let’s start with scale. Today, roughly 40% of U.S. households are renters, a share that rises to 50 to 60% in many urban and suburban markets. That alone makes renters impossible to ignore. More importantly, approximately 70% of first-time home buyers previously rented. In other words, the majority of new buyers do not enter the market as owners. They start as renters.

If you are not engaging renters with future homeownership in mind, you are missing where most buyers actually come from.

Many Renters Are Already Paying Buyer-Level Housing Costs

Affordability is often cited as the reason renters cannot buy. Recent market data challenges that assumption.

New reporting shows the spread between monthly rent and monthly ownership costs has narrowed significantly in recent quarters, reaching one of its tightest ranges in years. In practical terms, that means many renters are already paying amounts comparable to ownership.

In large MSAs, it is increasingly common to see:

• Rental prices at or above estimated monthly mortgage payments
• Renters paying multiple months of rent upfront, amounts comparable to typical first-time buyer down payments

When you see a renter comfortably paying buyer-level monthly costs, you may already be working with a future buyer, whether they realize it yet or not.

Renters Are Thinking About Buying, Even If They Do Not Say It

Intent data reinforces this opportunity. Research found:

• 25% of renters who recently moved seriously considered buying
• 37% of renters plan to buy on their next move
• 42% say they are likely or very likely to buy if mortgage rates decline

That is not casual interest. It represents a significant portion of today’s renter population already open to homeownership. For agents, this matters because renters do not need persuasion. They need information and timing.

The Desire to Own Has Not Disappeared. It Is Delayed.

There is a common belief that younger generations are no longer interested in homeownership. The data does not support that. A Freddie Mac consumer survey found that 86% of Gen Z respondents want to own a home, with many expecting to buy around age 30.

The takeaway is clear. The desire to own remains strong. The timeline has simply shifted. Agents who engage renters early stay relevant when that timeline accelerates.

Most Buying Barriers Are Actually Education Gaps

When renters explain why they cannot buy, the reasons are consistent:

• “I need 20% down.”
• “PMI is too expensive.”
• “Rates are too high.”
• “The process is overwhelming.”

Industry data tells a different story:

• First-time buyers frequently put down far less than 20%, with 3 to 10% being common depending on the loan program
• PMI costs are often overstated by online calculators that do not account for credit profile or loan structure
• Gift funds are common among first-time buyers and are frequently present in roughly 20 to 25% of transactions

In many cases, renters are not blocked by affordability. They are blocked by assumptions. That is where real estate agents provide meaningful value.

Early Lender Conversations Change Outcomes

Lender insights consistently show that earlier conversations reduce fallout later in the buying process. When renters speak with a lender early, before showings or offers, they:

• Replace assumptions with real qualification numbers
• Understand what they can do now versus what to work toward
• Develop clearer and more confident timelines

From an agent perspective, early lender introductions protect time, reduce friction, and build trust.

“Not Ready” Renters Are Still High-Value Leads

Another important reality is that most first-time buyers are not years away. They are often 6 to 18 months away from purchase readiness.

Life events drive buying decisions, including:

• Marriage or cohabitation
• Children
• Job stability or income growth
• Rising rents

Agents who stay visible during this window, without pressure, are the ones renters call when timing changes.

Scaling Renter-to-Buyer Conversion Requires Systems

The challenge is not recognizing renter potential. It is time. Manually nurturing dozens of renters is not realistic, which is why tools like RenterLift help agents:

• Educate renters over time
• Support financial readiness, including rent reporting
• Track engagement and buying signals
• Re-engage renters as purchase readiness increases

The goal is not to push renters into buying. It is to stay connected until buying makes sense.

The Bottom Line

The data is consistent across sources:

• Renters make up a substantial share of the housing market
• Most first-time buyers come from rentals
• Many renters already pay buyer-level housing costs
• The desire to own remains strong, especially among younger buyers

Agents who treat rentals as the first step in the buyer journey, not the end, build stronger relationships and more predictable pipelines.

Want to go deeper? Download the full playbook

For agents looking to put these ideas into action, we also created a comprehensive Renter-to-Buyer Conversion Playbook that expands on:

• Buyer readiness signals
• Common first-time buyer barriers
• Agent–lender workflows

Download the playbook here.

Ready to Nurture Renters? Introducing RenterLift

RenterLift helps agents guide renters toward homeownership with smart budgeting and home search tools, buyer education resources, and access to local experts at every stage of the buying journey, turning renters into lifelong clients. Join the waitlist today for updates about the launch!