October 23rd, 2024
Prices for single-family home rentals continued their steady growth in Q3 2024, increasing 3% year-over-year (Y-o-Y) and 0.5% over the prior quarter. While home rental prices grew, the pace of growth slowed from the previous quarter when annual growth was 4.2%.
One of the biggest drivers of growth in this segment is the ongoing demand for rental housing in both suburban and urban areas, fueled by high mortgage rates and rising home prices, which have kept many would-be buyers in the rental market.
According to the latest report from the National Association of Realtors (NAR), many prospective homebuyers are still struggling to afford current prices. As a result, transactions fell by 4.2% in August 2024 compared to the same month last year, with many delaying their home purchases.
While apartment rents have softened due to a boom in new construction leading to increased competition and higher vacancy rates, there has been limited new construction for single-family rentals as the vast majority of single-family rentals come from existing housing stock.
Regionally, the Midwest and Northeast saw the largest annual growth in single-family rental prices, each topping 9%, while the Southeast and Southwest experienced more modest growth, at 2.2% and 3%, respectively.
The regions with the highest rent growth also saw significant increases in home sale prices, highlighting that continued rises in home prices are likely to drive up rental prices as well.
Among cities with populations over 250,000, Buffalo, NY (+29%) experienced the highest annual growth in single-family home rents, followed by Jersey City, NJ (+18%), Milwaukee, WI (+13%), Chula Vista, CA (+12%), and New Orleans, LA (+12%).
With an average rent of $2,057 for three-bedroom houses, Buffalo remains more affordable than many major U.S. cities. However, recent price increases have made single-family rentals more expensive than other cities in Upstate New York, such as Rochester and Syracuse. Buffalo was ranked by Moody's as one of the top-performing cities for single-family investors and identified by Zillow as one of 2024’s hottest housing markets, which may have driven increased competition.
In contrast, several cities saw rent price declines compared to the same period last year, though these decreases were modest. Fort Wayne, IN (-2%), Oakland, CA (-2%), Gilbert, AZ (-2%), Laredo, TX (-2%), and San Antonio, TX (-2%) saw the largest decreases.
Among mid-sized cities (populations between 100,000 and 250,000), Burbank, CA (+22%), Torrance, CA (+17%), Kansas City, KS (+16%), and Rockford, IL (+15%) had the highest rent increases, while Tuscaloosa, AL (-8%) and Lehigh Acres, FL (-7%) saw the steepest declines over Q3 2023.
San Francisco, CA, Irvine, CA, Los Angeles, CA and San Diego, CA top the list of the most expensive cities for single-family home rentals in the U.S., with Boston, MA and Miami, FL being the only cities outside California in the top 10.
San Francisco, CA remains the most expensive city for single-family rentals among U.S. cities* with populations over 250,000 with the average rent for a 3-bedroom house at $5,409 in Q3 2024 (*Single-family rentals in New York City are not tracked by Rentometer).
Irvine, CA follows closely at $5,280 (+8% Y-o-Y), with Los Angeles, CA at $5,229 (+4% Y-o-Y), San Diego, CA at $4,802 (+8% Y-o-Y), and Boston, MA at $4,304 (+8% Y-o-Y).
Among the ten most expensive cities, only San Francisco and Miami saw rents remain relatively unchanged compared to the previous year, while Irvine, San Diego, and Boston experienced the largest increases, each at 8%.
On the other end of the spectrum, Toledo, OH is the most affordable large city for renting single-family homes. The average rent for a 3-bedroom home in Toledo was $1,214 in Q3 2024, up 3% from last year, in line with national average rent growth, but lower than the regional average.
Wichita, KS ($1,339) and Detroit, MI ($1,353) ranked as the second and third most affordable large cities, respectively, though rent in Detroit increased at a faster pace than the national average (+7% Y-o-Y).
Fort Wayne, IN ($1,490, -2% Y-o-Y) and Memphis, TN ($1,502, +5% Y-o-Y) round out the top five most affordable large cities.
All ten of the mid-sized cities with the highest single-family rental prices are in California.
Huntington Beach, CA ranks as the most expensive mid-sized city, with the average rent for 3-bedroom homes at $5,724 in Q3 2024 (+10% Y-o-Y). Costa Mesa, CA follows at $5,471 (+2% Y-o-Y), and Burbank, CA ranks third at $5,457 (+22% Y-o-Y).
Jackson, MS is the most affordable mid-sized city for renting single-family homes. The average rent for a 3-bedroom home is $1,239, though rents have increased by 7% from last year, more than double the national average of 3%.
Akron, OH ($1,259, +4% Y-o-Y) and Shreveport, LA ($1,275, -1% Y-o-Y) also rank among the most affordable midsize cities.
Among cities with populations under 100,000, Newport Beach, CA ($7,312) is the most expensive in the country, followed by Dana Point, CA ($6,784) and Palo Alto, CA ($6,782).
Notably, Newport Beach has the highest rent prices for single-family homes across all U.S. cities analyzed. Rents for single-family homes in Newport Beach increased by 9% year-over-year (Y-o-Y), roughly three times the national average.
The top of the list is largely dominated by coastal California cities—such as Redondo Beach ($6,594), Santa Barbara ($6,666), San Clemente ($6,263), and Santa Cruz ($5,369)—along with a couple of expensive cities in Silicon Valley, Menlo Park ($6,395) and Palo Alto. Coral Gables, Florida is the only city outside California to rank in the top 10.
For more affordable locations, head to the South or the Midwest. Albany, Georgia has the lowest single-family home rents among all 757 cities analyzed. The average rent for a 3-bedroom single-family home in Albany was $1,113 in Q3 2024, up 5% Y-o-Y. Flint, MI follows with an average rent of $1,134, and Del City, OK with an average rent of $1,191.
Rent prices in the Northeast have had the highest regional increase since the same period of last year, up 9.7%. Buffalo, NY (+29%), Saratoga Springs, NY (+29%), Jersey City, NJ (+18%), Allentown, PA (+12%) and Staten Island, NY (+11%) were among the places with the highest annual price increases.
Newton, MA and Boston, MA were the most expensive markets in the Northeast with average rents for three-bedroom single-family rentals of $4,591 respectively $4,304. It’s important to note that Rentometer does not track areas like Manhattan, Brooklyn, and other locations with a high percentage of luxury listings, such as Southampton, NY. Listings priced at $10,000 and above were excluded from our reporting. Please refer to our full report for more details.
Single-family rent prices in the Midwest increased by 9.2% Y-o-Y in Q3 2024, three times higher than the national average. Among the region’s largest cities, Milwaukee, WI ($1,736) experienced the largest rent growth, up 13% Y-o-Y, Cleveland, OH ($1,524) saw an increase by 9% Y-o-Y, while Indianapolis, IN ($1,755), Kansas City, MO ($1,711) and Cincinnati, OH ($2,005) saw rents growing by 8%.
The sizable regional price increase is evidenced by very strong rent growth in other major cities: three-bedroom single-family homes rents increased by 7% Y-o-Y in Detroit, MI ($1,353), while rents in Lincoln, NE ($1,712), Columbus, OH ($1,874) and St. Louis, MO ($1,674) increased by 6% Y-o-Y.
The largest rent growth in the Midwest, however, was experienced in small and mid-sized cities: single-family rent prices increased by 28% Y-o-Y in Iowa City, IN ($2,189), 25% in Bloomington, IN ($2,390) and 24% in Flint, MI ($1,134).
Despite the sizable average rent increases experienced in the region, cities in the Midwest remain largely more affordable than in other parts of the country.
Rent prices for single-family homes in the Southeast increased by 3.6% Y-o-Y in Q3 2024, slightly higher than the national average. Among the region’s largest cities, New Orleans, LA ($2,487) experienced the largest rent growth, up 12% Y-o-Y, Louisville, KY ($1,697) saw an increase by 9% Y-o-Y, while Lexington, KY ($1,858) and Greensboro, NC ($1,794) saw rents growing by 7%.
Two major cities in Florida – Tampa and Miami – saw some of the region’s weakest rent growth, single-family home prices decreasing by 1% Y-o-Y in Tampa ($2,591), while remaining flat in Miami ($4,036). Despite the lack of rent growth in Miami, the city remains the most expensive large city in the region.
Single-family home prices also remained flat compared to the same period last year in Nashville, TN ($2,654).
Among small and medium-sized cities, rent growth saw a much larger disparity. A number of small and mid-sized cities in Florida saw significant rent declines - Wilton Manors, FL (-8% Y-o-Y), Bonita Springs, FL (-7%), Lehigh Acres, FL (-7%), Naples, FL (-6%) or Oviedo, FL (-5%), together with Tuscaloosa, AL (-8%) and Fort Smith, AR (-7%). On the other hand, single-family rents in Anderson, SC increased by 22% Y-o-Y, while rents in Sumter, SC and Charlottesville, VA increased by 19%.
Single-family rent prices increased by 2.2% in Q3 2024, below the national average. Among the region’s largest cities, Plano, TX ($2,783) and Tulsa, OK ($1,690) saw the largest increases, up 10% Y-o-Y, followed by El Paso, TX ($1,730) up 8%, while single-family rents in Dallas, TX ($2,941) and Tucson, AZ ($2,106) increased by 7%.
A handful of large cities saw rent prices drop compared to the same period last year: Laredo, TX ($1,966), Gilbert, AZ ($2,388), and San Antonio, TX ($1,826) saw rent prices drop by 2% Y-o-Y, while rents dropped 1% in Corpus Christi, TX ($1,957) and remained flat in Austin, TX ($2,792).
Dallas, TX was the region’s most expensive large city with three-bedroom single-family homes priced on average at $2,941, followed by Austin, TX ($2,792) and Plano, TX ($2,783), while Lubbock, TX was the region’s most affordable large city with average rent priced at $1,539.
Average single-family rent in the Rocky Mountain region was 4.1%, slightly higher than the national average.
A handful of Colorado cities experienced double-digit rent growth: Boulder, Lakewood, Arvada and Englewood saw average prices for single-family rents up 10% Y-o-Y, in-line with Idaho’s Meridian (up 10%) and Star, ID (up 11%).
Boulder, CO was also the region’s most expensive city with three-bedroom single-family rentals priced on average at $4,089 in Q3 2024. Denver, CO, was the second most expensive city in the region with single-family rentals priced at $3,157, while Parker, CO, came in third with average prices at $3,141.
On the other hand, average rent prices for single-family homes decreased by 11% in Bozeman, MT and were down by 7% in Missoula, MT, the largest drops in the region.
Average rents for single-family homes grew by 6.5% in the Pacific region, twice the national average. Among the region’s largest cities, Chula Vista, CA ($3,993) saw the largest rent growth, up 12% Y-o-Y, followed by Sacramento, CA ($2,763), up 10% Y-o-Y, while prices in Irvine, CA ($5,280) and San Diego, CA ($4,802) increased by 8% Y-o-Y.
On the other hand, Oakland, CA ($4,002) saw average prices for single-family rentals drop by 2% Y-o-Y, while prices in San Francisco ($5,409) remained flat. Fresno, CA ($2,303) and Seattle, WA ($3,785) also saw weak rent growth, pricing increasing by 1% over the same period of last year.
The region’s price growth was driven by price increases in many small and mid-sized cities: three-bedroom single-family rents increased by 29% Y-o-Y in Redondo Beach, CA ($6,594), by 26% Y-o-Y in the desert resort town of La Quinta, CA ($4,897) and 22% in La Mesa, CA ($4,159) and Burbank, CA ($5,457).
The methodology that Rentometer used to complete our nationwide rent price analysis is as follows:
Geography: Rental markets in 757 U.S. cities across six regions.
Property type: 3-bedroom single-family rentals (SFRs) with all bathroom counts.
Analysis: Rent data was analyzed year-over-year for Q3 2024 and Q3 2023.
Data: Includes data collected and updated between July 1st and September 30th for 2024 and 2023.
Exclusions:
Cities with fewer than 25 new or updated rentals within any quarter were excluded.
Rentals below $500 (minimum price) or above $10,000 (maximum price) were excluded.
For over the past two years, Rentometer has closely tracked and reported on three-bedroom single-family home rentals. Single-family home rentals house 41% of the U.S. renter population, and three-bedroom single-family homes are a preferred option for many families and investors.
Rentometer was founded by two seasoned real estate entrepreneurs:
Mike Lapsley is a proptech veteran with over 25 years of experience in the rental housing industry. Prior to Rentometer, he was the CEO of RentGrow, a leader in automated resident screening systems, which was successfully acquired by Yardi Systems. Mike holds a BS in Business Management and Accounting from the University of Lowell.
Torrence C. Harder has over forty years of experience investing in entrepreneurial companies. He founded Harder Management Company, Inc., which has founded and ventured sixteen companies. Torrey holds a BA with Honors from Cornell University and an MBA with Honors from the Wharton School of the University of Pennsylvania.
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