A “For Rent” sign is posted in front of a home in Miami, Florida, on December 12, 2023.
Joe Radle | Getty Images
Rent growth for single-family homes in August was only 1.4% year-on-year, slowing from a 2.3% annual rise in July, according to analysis and data firm Kotality. This was well below last year’s average 3% rise and the smallest increase in 15 years.
Rent growth slowed across all price ranges, a trend that continued into the second half of the year. Rental rates were on an upward trend in the first half of this year.
However, there was wide variation across regions. Chicago had the highest annual rent increase rate in August at 4.7%, followed by Los Angeles at 2.8%, Philadelphia at 2.7% and Washington, D.C. at 2.6%.
Rent growth in Dallas fell by 0.6%, the lowest in the nation. The city has recently seen a surge in new apartment buildings, with supply outstripping demand, Kotality said.
“Rent growth remains strong in Atlanta, Philadelphia and Los Angeles, with Los Angeles currently only slightly above pre-wildfire levels from January,” said Molly Boesel, senior principal economist at Kotality. “Los Angeles ranks second among the top 10 metropolitan areas for rent growth, suggesting that even as national price increases moderate, local conditions such as recovery efforts, limited housing supply, and local economic factors may still impact rental trends.”
Luxury real estate performed best, with annual rent growth of 1.6% in August. Low-end rent prices increased by 1.1% year-on-year, but both were well below last year’s increases.
Rents for apartment complexes are also slumping. This is largely due to the sector’s construction boom, with record numbers of units delivered over the past few years, and even more units set to be delivered this year.
According to another report from Apartment List, apartment rental prices nationwide fell 0.8% year-on-year in September. However, the decline was slightly smaller than the annual drop in August. Rent has continued to decline for five consecutive months.
According to Apartment List, the nationwide apartment vacancy rate in September was 7.1%, the highest ever for the index.
Apartment List researchers say, “Although the multifamily construction boom has passed its peak, there is still a healthy supply of new units on the market, and vacancy rates are still on the rise.”
The national median monthly rent in September was $1,394, down $11 from September 2024, according to the report. Rent prices continue to fall, albeit slowly, and rents are now below their most recent peak in August 2022, or $48 less per month.
“However, that cooldown comes after a period of record rent increases, with typical rent prices still 22% higher than January 2021 levels,” the researchers wrote.
