A “For Rent” sign is posted in front of a home on December 12, 2023 in Miami, Florida.
Joe Raedle | Getty Images
Rents for single-family residential homes rose just 1.4% in August from a year earlier, according to analytics and data firm Cotality, down from a 2.3% annual gain in July. It’s also well below the 3% average gain seen last year and is the smallest increase in 15 years.
Rent growth weakened across all price levels, continuing a trend that continued into the second half of this year. Rents strengthened in the first half of this year.
However, there are strong regional variations. Chicago saw the highest annual rent growth at 4.7% in August, followed by Los Angeles at 2.8%, Philadelphia at 2.7% and Washington, D.C., at 2.6%.
Dallas saw a 0.6% decline in rent growth, the lowest in the country. The city recently saw a surge of new multifamily apartments hitting the market, keeping supply above demand, Cotality said.
“Atlanta, Philadelphia and Los Angeles continue to see stronger rent growth, with Los Angeles now barely above its pre-January wildfire level,” said Molly Boesel, senior principal economist at Cotality. “Los Angeles ranks second among the top 10 metros in rent growth, suggesting that local conditions such as recovery efforts, limited housing supply and regional economic factors may still influence rent trends, even as national price growth moderates.”
High-end properties fared best, with annual rent growth in August of 1.6%. Low-end rental prices increased 1.1% from last year, but both prices are well below last year’s gains.
Rents for multi-family apartments have also fallen. That’s largely due to a construction boom in the area that has delivered a record number of units in recent years, with more planned this year.
Apartment rent prices nationwide fell 0.8% in September from a year earlier, according to a separate report from Apartment List. This drop was, however, slightly lower than the annual drop in August. Rents have been increasingly negative for five consecutive months.
The national multifamily vacancy rate was 7.1% in September, a record low for that index, according to Apartment List.
“We are past the peak of a surge in multifamily construction, but a healthy supply of new housing is still coming to market and vacancy rates are still rising,” according to Apartment List researchers.
The national median monthly rent in September was $1,394, down $11 from September 2024, according to the report. As rents continue to fall, albeit slowly, rents are now below their most recent peak in August 2022, $48 less per month.
“But this slowdown came after a period of record rent growth, and the typical rent price remains 22% higher than its January 2021 level,” the researchers wrote.