Strong demand pushes rent prices up nationwide
The cost of renting a single-family home in the US continues to climb, reaching a new record high in May 2024.
Soaring home prices coupled with rising mortgage rates are forcing more people to stay in the rental market, pushing rents up across the country.
New data from CoreLogic revealed that single-family rent growth reached its strongest point in over a year in May 2024. This trend puts a strain on renters, particularly those in lower income brackets.
Rising rents are partially due to the strong job market and increasing wages, which are helping many tenants keep up with rent hikes, particularly in pricey coastal cities where median rents top $3,000 a month.
“Single-family rent growth regained strength in May, increasing to the highest annual growth rate since April 2023,” said Molly Boesel, principal economist at CoreLogic. “Monthly rent growth also picked up in May and was above what is typically recorded in spring months.”
CoreLogic’s report examined four tiers of rental prices and two property-type tiers. All four cost tiers saw annual gains, with only the lowest tier falling below the national growth rate. The breakdown of national single-family rent growth across these tiers is as follows:
- Lower-priced (75% or less than the regional median): up 1.2% from last year, down from 5.3% in May 2023.
- Lower-middle priced (75% to 100% of the regional median): up 3.4%, down from 3.8%.
- Higher-middle priced (100% to 125% of the regional median): up 3.3%, up from 3.1%.
- Higher-priced (125% or more than the regional median): up 3.3%, up from 1.6%.
“While the annual rent growth in higher-priced properties picked up momentum,” Boesel added “lower-priced properties saw a slowdown in growth and had the lowest annual rent increase of any price tier in May. However, even though growth for lower-priced rentals has slowed, properties in this price range saw gains of more than 30% over the last four years.”
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The report also highlighted differences between attached and detached rentals. Attached single-family rental prices rose by 2.8% year over year in May, compared to a 3.6% increase for detached rentals.
Among the 20 metropolitan areas analyzed, St. Louis led with the highest year-over-year rent increase at 6.2%. New York and Seattle followed closely with 5.9% increases, and San Francisco reported a 5.2% rise. On the flip side, Austin, Texas, and Phoenix saw slight declines, with rents falling by 0.6% and 0.3%, respectively.
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