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Nests built on For Sale/For Rent signs, and birds moving from one to the other.
Kiersten Essenpreis for Money

Cramped in a one-bedroom, new parents Kristina and David Mahon were desperate to buy a larger home. But after scouring the Pompano Beach, Florida market for nearly a year (and losing out on 20 houses in the process), the pair eventually gave up.

Now, the couple — with a 10-month old baby in tow, no less — are renting, a decision Kristina says they felt “forced” into.

“I feel like I’m wasting money for something that’s not mine,” Kristina says. The rental“options were very limited, and the prices were on the high side of what we were comfortable spending on a rental.”

The Mahons’ is a common storyline these days, according to those in the industry. Burned-out house hunters are tired of bidding wars, rising prices and dwindling options and are bowing out of the purchase market, opting to rent instead.

“It’s common given the current market and environment that we are in,” says Kaley Tuning, the Native Realty agent who worked with the Mahons. “It just becomes frustrating for the everyday buyer. I’ve had buyers bid upwards of $40,000 over asking price and still get outbid.”

Unfortunately, the pivot to renting isn’t always easy. While the move may afford frustrated buyers time to wait out the competitive housing market, it often means entering an equally hot rental scene — one where rising rents and dwindling supply are growing concerns.

According to Realtor.com, median national rents grew a whopping 11.5% between August 2020 and August 2021. And rent applications? Those are up as much as 95% in some cities, according to apartment listing platform RentCafe.

For hopeful homeowners, it’s made for a unique catch-22 that’s as frustrating as it is costly.