U.S. short-term rental market trends and challenges in 2025

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The industry faces challenges in cost management, saturation, and regulation, which are affecting its growth and sustainability

Mar 26, 2025

The U.S. short-term rental (STR) market has significantly evolved post-pandemic, facing increased competition, stricter regulations, and diverse host motivations. While the sector initially thrived due to private and flexible accommodations, it now grapples with sustainability challenges in a saturated and closely scrutinized landscape.

Key takeaways

STR demand surged during the pandemic but has since leveled off with rising competition and market saturation.
Small hosts (with <10 properties) vary widely in financial goals—45% aim for profit, while others rent to offset or cover housing costs.
Cost management is the top concern, as competition drives the need for higher standards and tighter budgets.
Guest expectations for consistent experiences remain a challenge for many small operators.
Regulation continues to threaten business stability, as seen in cities like New York.
One in four hosts has stopped renting at least one property, and 10% of homeowners are former STR hosts.
While some firms aim to scale, sustainable growth remains elusive for many property managers.