The rent for multifamily units and single-family homes went in opposite directions in recent months, with the rent for apartments continuing to drop and the rent for homes soaring higher.
According to CoreLogic, rents for single-family homes rose 2.4% year over year in August, the lowest rate of growth they have recorded since the fall of 2023. On a happier note, asking rents for apartments in September fell 0.5% year over year, according to Realtor.com. It was the 14th month of year-over-year rent declines.
Median apartment rents in the 50 largest metro areas fell in September to $1,743, which was $10 less than in August and $17 below the peak rental rates of August 2022. Lower prices were registered in all size categories, with larger percentage declines in smaller-sized units. Year over year, studio apartments dropped 2.3%, one-bedroom apartments fell 0.5% and two-bedroom apartments decreased 0.4%. However, despite the recent reductions, rental rates were still $286 (19.6%) above the national levels seen in September 2019.
Metro areas with the greatest rent declines in September were Nashville, with a drop of 4.8%, followed by Dallas-Fort Worth and Denver, which both experienced a 4% fall. Metros with the fastest rent increases were Cincinnati, which was up 3.4%; Washington, D.C., which rose 2.9%; and the greater New York City area, where prices averaged an increase of 2.8%.
Unlike multifamily properties, rents for single-family homes have not offered any price breaks in recent years. Nationally, home rental rates were up 33% since the beginning of the pandemic. While the Sun Belt’s housing market is beginning to cool, home rental rates have still seen major gains in the past four years. Some markets where prices soared the most include Miami, which is up 55%; Orlando, up 41%; and Phoenix and Tucson, Arizona, which have both seen rent increases of 38%.
Among the major U.S. metros, CoreLogic reports that the cities showing the highest annual single-family rent increases in August were Seattle, which jumped 5.8%; while New York City and Washington, D.C. both experienced increases of 5.5%. In Austin, rents fell 2.3% year over year and Phoenix registered no annual change.
“Single-family rent growth slowed in August from both a year and a month ago,” said Molly Boesel, CoreLogic’s principal economist. “The monthly drop in single-family rents of 0.2% was notable as it was contrary to the typical August increase of 0.3% and therefore points to quickly decelerating single-family rents. However, some metro areas bucked the national trend – the top metros in rent growth in August all had accelerating gains from a year ago.”
