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

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

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.

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