Renters are a bigger drag on consumer spending than homeowners. Here's why.

• Consumer spending has been weaker among renters than homeowners, Bank of America found.
• That's as rent inflation has surged, putting downward pressure on discretionary spending for tenants.
• But most homeowners have been largely shielded from the recent spike in mortgage rates.

A surge in rent inflation has made tenants more frugal spenders compared to their home-owning peers, according to Bank of America. 

That's because year-over-year rent inflation jumped to 8.8% in March from a 2021 low of 2%, forcing tenants to tighten their belts more, the bank said, citing Census Bureau data.

Meanwhile, a majority of homeowners locked in mortgages rates before they spiked over the past year a half and have yet to feel the impact on their discretionary spending.

BofA's own card-spending data shows that excluding housing-related costs renters spent 1.4% less last month compared to a year ago, while homeowners spent 0.8% more. 

In fact, homeowners demonstrated stronger growth in every major sector of spending over the past three months, apart from furniture. 

The weak demand for furniture is due to a decline in new house purchases, decreasing the need for updated items, BofA wrote. Restaurants are the only sector where both homeowners and renters are spending more.

The split in spending trends between renters and homeowners also held up after accounting for differences in income, BofA noted.

However, the two groups may eventually see their spending growth align, given expectations of higher central bank interest rates, which would continue to push mortgage rates up while helping ease rent inflation.

Already, mortgage rates have shot up as a consequence of the Federal Reserve's tighter monetary policy. And as more buyers purchase properties at current rates, these new homeowners will most likely have to limit their consumer spending to meet their mortgage payments. Currently, the 30-year fixed mortgage stands at 6.81%

Meanwhile, the rental market has already started cooling, with the average asking monthly rent dipping 0.5% in May, among the 50 largest metro areas. That's as recently constructed apartments, as well as an all-time high in new built-for-rent homes, are providing renters with more options.