Single-family rent growth slows to 14-year-low

Nationally, rents rose by 1.5% year over year in November

Single-family rent growth slows to 14-year-low

Nationally, rents rose by 1.5% year over year in November
RENTSupNdown

Rent inflation in single-family homes has cooled off across the country, CoreLogic reported this week.

Nationally, rents for single-family units rose 1.5% year over year in November, the lowest annual increase in 14 years, according to the real estate data and analytics company.

Rents for single-family homes also declined compared to November 2023 in various cities. Austin led the way with rent decreases of 2.4%. It was followed by Boston, which was down 1.5%; Phoenix (-1.2%); and Tucson, Arizona (-0.4%). Dallas, Orlando and San Diego all saw declines of 0.3%.

Despite the slowdown in rental growth, demand for rentals “should remain strong as wage and job growth are anticipated to remain strong this year,” wrote Molly Boesel, CoreLogic senior principal economist.

Despite the low numbers, some cities experienced sizeable rent increases. Among the 20 cities tracked, Detroit had the largest annual increase at 6.1%. Even with the increase, Detroit remained one of the more affordable places to rent a single-family home. The median price for a three-bedroom home was $1,777 in October, among only three major markets with sub-$2,000 monthly rents.

The other two were Philadelphia ($1,634) and Houston ($1,921), CoreLogic reported. The rental growth in Detroit indicates “Americans are seeking more budget-friendly places to live,” particularly in the Midwest.

Washington, D.C., saw the second highest annual jump in single-family rents at 5.5%, likely a reflection of the changeover in administrations, CoreLogic reported. Honolulu, Hawaii, gained 4.3%, the New York-New Jersey area was up 4%, and Chicago rents rose 3.8%.

The data on single-family rental costs has not been consistent, however.

On Wednesday, Zillow released a report on single-family homes that showed rents in detached homes were growing at a 4.4% annual pace and that growth is accelerating. Zillow writes that it is partially due to a lack of construction and increased demand among younger people for roomier rentals.

“Right now, more multifamily units are hitting the market than at any time in the past 50 years, but detached homes aren’t seeing the same surge in construction,” said Skylar Olsen, Zillow chief economist. “We’ve also got the large millennial generation wanting to move into a larger space.”

Author

  • Victor Whitman

    Victor Whitman is a contributing writer for Scotsman Guide and a former editor of the publication’s commercial magazine. 

More Headlines