Single-family rent growth slackened in September to its slowest pace in 15 years, increasing 1% from last year according to the real estate analytics firm Cotality.
The company’s Single-Family Rental Index showed single-family rents had decreased in September in one-quarter of the 50 largest U.S. metros.
“The story of the single-family rental market is one of deceleration at the national level, but with significant local nuances,” said Molly Boesel, senior principal economist at Cotality, calling the trending deceleration “welcome news for renters struggling with affordability.”
Cotality reports that single-family rents were 29% higher over the past five years, adding as much as $7,300 per year to national average rent bills, and consuming “about one-third of the increase in median family income over that time.”
“This underscores the challenge: While the pace of growth is easing and even falling, the cumulative impact of past rent hikes continues to put immense pressure on household budgets,” said Boesel.
Chicago experienced the highest annual rent growth in September among major metros tracked by Cotality, rising 4.3%. Washington, D.C., rents climbed 3.1%, while rents in Philadelphia increased 2% and Los Angeles rents rose 1.5%.
Rents fell 1.1% over the year in Dallas, the lowest rental growth rate among major metros.
The Federal Reserve’s semiannual Financial Stability Report, released Nov. 7 by its Committee on Financial Stability, underscored trends closely watched by Fed policymakers as historic housing inflation continues to erode affordability.
Historically, appreciation in U.S. house prices and rents have been closely aligned, with only two significant deviations since 1984, according to research published in February by the Federal Reserve Bank of Dallas. Those divergences occurred in the early 2000s and following the COVID-19 pandemic.
Consequentially, rent appreciation has typically closely tracked the personal consumption expenditures price index, the Fed’s preferred measure of overall inflation.
“Rent increases accelerated following the pandemic, although not as sharply as house prices,” wrote J. Scott Davis, assistant vice president in the research department at the Dallas Fed, underscoring today’s elevated house price-to-rent ratios.
The listings platform Realtor.com released new figures Tuesday showing the national median rent across apartment rentals dipped 1.7% in October from the same time last year, the third consecutive month of softening.
Danielle Hale, chief economist at Realtor.com,, said the data reveals a rental market that “continues to cool,” with rising out-of-market demand indicating more renters are willing to move to other cities for more affordable options.
The national median asking rent for zero- to two-bedroom properties among the 50 largest U.S. metros was $1,696 in October, the company reports, down $29 from one year ago and $9 from last month.
“While the October median rent was $63 (-3.6%) below the August 2022 peak,” the Realtor.com report read, “it remains $245 (16.9%) higher than in 2019.”
