Market Overview: Why 2026 Could Be the Best STR Year We’ve Seen in a While

The last few years of short-term rentals have been… a lot.

2021–2023 was chaos: Cheap money, aggressive buying, overbuilding, and hype-driven investing.

2024–2025 was the reset: cooling demand, rising operating costs, tighter margins, and a reality check for anyone who bought without a plan.

So what's in store for 2026? Let's find out.

2026: A Market Normalization Year (And That’s a Good Thing)

2026 is not expected to be another boom or a crash.

Instead, it’s all about normalization.

That might sound boring, but historically, these are often some of the best years to invest—especially if you know how to read the market.

According to AirDNA’s latest U.S. outlook, the STR industry is entering a new phase where several things are finally lining up at the same time: stabilizing mortgage rates, improving investment returns, and demand that’s expected to build into 2027.

After years of extremes, the market is starting to behave more predictably. And that's exactly what hosts and investors should want.

2025 STR Demand vs. What We Expect in 2026

Despite what the headlines suggested, an Airbnbust didn’t happen, and STR demand didn’t fall off a cliff in 2025.

AirDNA data shows that:

• Post-pandemic travel spikes leveled out
• Leisure travel remained resilient, especially in drive-to and experience-based markets
• Urban demand improved, but didn’t fully get back to the pre-2020 boom
• ADRs grew by ~1.2%, while Revenue per Available Room (RevPAR) increased by ~1.6%

Demand wasn't lower; it was just different.

Guests were more selective. They booked fewer trips and then made those trips count. Listings that clearly justified the stay with resort-level amenities, thoughtful Instagram-worthy design, and a memorable guest experience continued to perform, while generic options felt more pressure.

What STR Demand Could Look Like in 2026

Looking ahead, AirDNA is projecting modest but steady demand growth.

• Demand is expected to grow by ~1.5% in 2026
• Growth is forecast to accelerate to ~2.1% in 2027

That may not sound like a big deal, but with supply growth slowing, modest demand growth can have a major impact on occupancy and pricing for strong listings.

We expect the best performance in affordable, experience-driven destinations and popular domestic travel markets.

What Will Shape Short-Term Rental Demand in 2026

Hosts in the Host Camp community often ask why bookings feel slower or less predictable. Understanding the broader economy plays a big role in understanding Airbnb demand.

These are the biggest STR demand drivers to watch in 2026:

Income, Employment, and Economic Stability

Short-term rental demand is closely linked to household income and employment trends, and the broader outlook is more stable than it may feel.

Here’s what the data says:

• U.S. GDP is projected to grow ~2.5% year-over-year in 2026, with full-year growth around 2.8% (Goldman Sachs data)
• The probability of a recession in the next 12 months has fallen from 30% to ~20%
• U.S. unemployment stood at ~4.4% at the end of 2025, still low by historical standards. The number of unemployed people fell by 278,000.
• The number of unemployed people fell by ~278,000

AirDNA predicts that two indicators most closely tied to STR demand— household income and employment growth — will bottom out around Q2 2026, then begin improving.

Supply vs Demand: Why the Balance Is (Finally!) Improving

This is one of the most important shifts happening right now.

Compared to 2021–2022, new STR supply growth has slowed thanks to higher interest rates, rising insurance and operating costs, and tighter regulations in some markets.

New listings aren't coming up as often, especially from investors chasing easy returns.

Here's why that matters:

• Less new competition reduces demand dilution
• Pricing power slowly returns to strong listings
• Poorly differentiated properties and listings that give Airbnb a bad name get exposed faster

The era of “just list it and it’ll work” is officially over. And for serious operators, that’s a good thing.

STR Trends Airbnb Hosts Need to Watch in 2026

Here are a few trends that will shape STR performance in 2026.

Booking behavior is shifting

Shorter lead times, more last-minute bookings, and greater sensitivity to cancellation policies mean pricing and responsiveness matter more than ever.

Experience beats size

Guests care less about square footage and more about purpose-built design and memorable moments. When choosing your next investment, space for amenities like hot tubs, pools, or pickleball courts can matter just as much as bedroom count. Clarity+flowClarity + flow

Sustainability is becoming a booking factor

According to Booking.com, 45% of travelers find sustainable accommodations more appealing and are willing to reduce energy use during trips. Sustainability might become a real competitive edge in 2026—not just a nice-to-have.

Pet-friendly listings command premiums

Nearly 60% of pet owners want to travel with their pets. Pet-friendly listings tend to see higher booking rates and can increase ADR by ~$17 per night on average.

Larger properties are seeing booking growth (but very selectively)

In 2025, six-bedroom properties saw ~12.6% booking growth, while five-bedroom properties grew ~10.6%, driven by group and multi-generational travel. The key is matching size to demand and your guest avatar.

Extended stays are more common

Stays of 7+ nights are growing faster than short stays, reducing turnover costs and smoothing out occupancy.

Secondary and rural markets are still gaining traction

AirDNA data shows rural bookings grew ~13.8% year over year, while suburban listings grew ~8.1%, driven by lower acquisition costs, lighter regulation, and experience-driven demand. Looking to invest in rural or raw land, read our raw land Airbnb guide to avoid expensive mistakes.

That said, demand still needs a draw like nature and outdoor activities or events.

The STR Premium: Does the Data Say Short-Term Rentals are a Solid Investment?

Time for one of the most important data points of the year. The STR Investment Premium is essentially the gap between what a property earns as a short-term rental and the monthly mortgage cost.

After the pandemic the STR premium hit extreme highs of up to $2,618/month. But they collapsed when rates rose and supply surged.

And then in 2025, the STR premium has rebounded to ~$989/month.

It's lower than the post-pandemic highs, but it's still more than 3× higher than the October 2023 low of ~$277. This new premium is the highest level since late 2022.

AirDNA expects the premium to keep growing through 2027 supported by:

• Steady mortgage rates
• Flat or softening home prices
• Gradual STR performance improvements

It's important to note that while the premium looks good compared to pre-pandemic years, the returns will be lower because of higher property costs.

Returns are improving—but solid underwriting matters more than ever.

The hosts who are enjoying great margins are:

• Analyzing their property and markets properly
• Adding upsells and experiences
• Running tighter operations

Final Thoughts

After years of extremes, the STR market is finally offering something investors rarely get: clarity and stability.

2026 won’t reward hype-driven investing.

It will reward thoughtful strategy, strong positioning, and hosts who understand what guests want and deliver.

If you want help building a real estate strategy based on today’s market and your goals, book a free strategy call with our coaches to map out your next move.

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