Growth in single-family rental prices slows down

CoreLogic‘s November 2024 Single Family Rent Index (SFRI) highlighted 1.5% annual growth for single family rental prices (SFRs). This represents the slowest growth in 14 years, although top price tiers maintain strong price growth.

CoreLogic’s SFRI report analyzes SFR rent price changes on a national level and across major metropolitan areas. November’s report tracked SFR price growth in 20 major markets nationwide. CoreLogic also examined four tiers of rental prices: lower-price, lower-middle price, higher-middle price and higher-price.

“Single-family annual rent growth slowed in November to the lowest rate in about 14 years. Wage growth outpaced single-family rent growth for much of the past two years which kept rent growth in positive territory,” said CoreLogic senior principal economist Molly Boesel. “Despite the recent slowdown in rent growth, demand for rentals should remain strong as wage and job growth are anticipated to remain strong this year.”

Detroit ranked No. 1 for SFR price growth, posting 6.1% annual growth in November 2024. Washington, D.C. followed behind with an annual increase of 5.1%. The Motor City offers affordability, CoreLogic noted, with the median rent price sitting below $2,000. CoreLogic attributed price growth in the nation’s capital to job moves and political changes.

“The median price to rent a three-bedroom home in Detroit was $1,777 in October, one of only three metros with a monthly cost of less than $2,000, yet another indicator that Americans are seeking more budget-friendly places to live, particularly areas in the Midwest.”

Eight more cities round out the top ten. Those cities included: Honolulu (+4.3); New York City (4.0%); Chicago (+3.8%); Philadelphia (+2.2); Houston (+1.8%); Los Angeles (+1.7%); Las Vegas (+1.4%); Seattle (+1.3%); and Miami (+1.2%). Five of the top ten areas for November rent price growth had prices above $3,000.

Higher-priced SFRs led with 2.2% annual growth in November 2024, up from 2% a year prior. They were followed by lower-priced SFRs (+1.9%), lower-middle priced SFRs (+1.7%) and higher-middle priced SFRs (+1.5%). Additionally, CoreLogic noted that detached SFRs outpaced attached SFRs in price growth.

There were glimmers of affordability in some areas in November. CoreLogic reported that Austin, Texas saw the sharpest decline in SFR prices in November, dropping by 2.4%. It was followed by Phoenix, Arizona (-1.2%); Tucson, Arizona (-0.4%); Dallas, Texas (-0.3%); Orlando, Florida (-0.3%); and San Diego, California (-0.3%).

In general, SFRs are outpacing other rental types like apartments. Zillow’s December 2024 rental market report found that SFRs were 20% more expensive than apartments. The average monthly rent price for SFRs was $2,174, compared to $1,812 for apartments. Higher mortgage rates and prices forced would-be buyers to rent detached SFR options, driving rent price growth in several markets.