Single-family rents reach record high, 20% above apartments
MWN-AI** Summary
Single-family rents in the U.S. have surged to record highs, now costing approximately $350 more monthly than renting a typical multifamily apartment. According to Zillow's latest market report, single-family rents have increased by 41% compared to pre-pandemic levels, while multifamily rents have risen by 26%. Notably, single-family homes command a price premium of around 20% over multifamily units, marking the largest gap ever recorded by Zillow.
A significant factor behind this trend is the persistent high mortgage rates, which have dampened buyer demand and slowed home value growth. Although the construction of multifamily units has surged—reaching levels not seen in half a century—there has not been a corresponding increase in single-family home construction. This discrepancy is accentuated by millennial renters, who are seeking larger living spaces but are deterred by challenging mortgage conditions.
As a result, single-family rental growth remains robust, averaging 4.4% annually, in stark contrast to the more stable 2.4% growth observed in apartment rentals. This shift in market dynamics has led to a rise in rental concessions, with property managers offering deals on 41% of listings, aimed at attracting tenants amid a competitive rental landscape.
On the sales side, housing inventory is recovering but still lags 25% behind pre-pandemic levels. This shortage opens the window for potential sellers, particularly those who might capitalize on current high prices rather than waiting for lower mortgage rates. Overall, the market appears set for continued fluctuations as buyers and renters navigate the evolving landscape.
MWN-AI** Analysis
Recent data indicates that single-family rents have surged to a record high, reaching approximately 41% above pre-pandemic levels, outpacing the 26% increase seen in multifamily rentals. This disparity, with single-family rentals currently costing about $350 more per month and sitting 20% higher than typical apartments, reflects a significant shift in market dynamics.
A primary driver of this growth is the generational shift among millennials, who are increasingly favoring larger living spaces due to prolonged delays in home purchasing. High mortgage rates discourage potential buyers, leading many to opt for renting instead. The supply of single-family rental homes remains constrained, as new builds do not match the pace of multifamily construction, further exacerbating the supply-demand imbalance.
As rental prices escalate, landlords are resorting to concessions—offering incentives like free months of rent or parking to attract tenants, with 41% of listings on platforms like Zillow featuring such offers. This indicates a competitive rental market, especially in robust employment hubs.
From an investment perspective, the rental market for single-family homes appears more resilient relative to the multifamily sector. Investors may consider opportunities in markets where the disparity between single-family and multifamily rents is most pronounced, like Salt Lake City, which boasts a 59% rent premium for single-family homes.
However, potential buyers should prepare for 2025 with a focus on improving their creditworthiness to optimize mortgage rates as inventory levels trend closer to pre-pandemic numbers. In markets exhibiting a softening of competition, buyers may find favorable conditions for securing homes. The ongoing rental dynamics underscore the importance of maintaining flexibility and readiness to adapt to these evolving trends.
**MWN-AI Summary and Analysis is based on asking OpenAI to summarize and analyze this news release.
PR Newswire
It costs about $350 more each month to rent a single-family home
- Rents for single-family homes are up 41% over pre-pandemic norms; multifamily rents have risen 26% in that time.
- Concessions are being offered on two out of every five rental properties on Zillow, another record.
- For-sale inventory continues to recover, but is still 25% below pre-pandemic norms.
SEATTLE , Jan. 22, 2025 /PRNewswire/ -- Rented single-family homes are the housing market's big standout right now, with costs 20% higher than that of a typical multifamily apartment, according to the latest market report 1 from Zillow®. That's the largest difference ever recorded by Zillow.
While stubbornly high mortgage rates are keeping a lid on buyer demand and home value growth, and a response from builders has kept multifamily rent growth stable for many months, rents for detached single-family homes continue to accelerate.
"Right now, more multifamily units are hitting the market than at any time in the past 50 years, but detached homes aren't seeing the same surge in construction," said Skylar Olsen , Zillow chief economist. "We've also got the large millennial generation wanting to move into a larger space. High and unpredictable mortgage rates and hefty down payments are pushing some to rent that lifestyle instead of buying it. Similarly discouraged, some homeowners may return to the market and sell to capitalize on record prices, rather than continue to wait for lower rates."
Looking at annual growth, rents for detached homes are up 4.4% — on par with their trajectory before the pandemic — while apartment rents are growing at a relatively stable 2.4% annually, a bit lower than the mid-3% growth seen in 2018 and 2019. Meanwhile, home value appreciation for owned homes has settled to 2.6% year over year, compared to 5.2% in December 2019 .
Single-family rents are up 41% since before the pandemic, compared to 26% on multifamily rents. Single-family rentals hold a 59% price premium over multifamily units in Salt Lake City , the largest difference among the 50 largest U.S. metros. Detroit has the smallest delta percentage at 9%, and Pittsburgh — where single-family construction has boomed over the past five years — had a low 14% difference.
Rents are sticky, but concessions keep rising
Despite the general surge in apartment construction, rents on the multifamily side are proving to be sticky. Annual rent growth has been relatively stable, in the mid-2% range, over the past year.
Property managers are instead increasingly turning to concessions to lure in tenants. These deal sweeteners, such as months of free rent or free parking, are now offered on 41% of all rental listings on Zillow, another record high. Zillow's Rental Market Report has additional data and details.
Millennials — the largest U.S. generation — are renting longer before buying a home. Zillow's latest Consumer Housing Trends Report found renters' median age to be 42 in 2024 , up from 33 just three years prior .
Buy side: Inventory recovery continues
Inventory continues to trend closer to long-term norms from before the pandemic. The number of homes on the market nationwide in December was just under 1 million — more than in any December since 2019. Inventory is now 25% below 2018–2019 averages for this time of year, far from the 37% shortfall of January 2024 or the record deficit of 51% seen in February 2022 . More choices for buyers means less competition over the newly listed homes and softer price growth ahead.
With any luck, the recent momentum of sellers returning to the housing market — some likely doubting that mortgage rates will drop anytime soon to improve their own buying situation — will continue to recover in the new year.
Now, 10 of the 50 largest major metros have more homes on the market than at this time of year before the pandemic. Those metros are concentrated in Florida , Texas and the South, where builders have been better able to keep up with demand, though Denver is in the mix, too.
Those considering buying a home in 2025 should make sure their credit is in good shape now and start taking steps to improve their score, if possible. What to expect in the market for 2025 and how to prepare financially for a home purchase is covered in this free webinar from Zillow .
Metro Area* | Single- | Multifamily | Single- | Share of | For-Sale | Zillow |
United States | $2,174 | $1,812 | 20 % | 41 % | -25 % | Neutral |
New York, NY | $3,674 | $3,108 | 18 % | 23 % | -56 % | Strong seller |
Los Angeles, CA | $4,181 | $2,690 | 55 % | 37 % | -26 % | Seller |
Chicago, IL | $2,317 | $1,907 | 21 % | 34 % | -49 % | Seller |
Dallas, TX | $2,323 | $1,532 | 52 % | 59 % | 2 % | Neutral |
Houston, TX | $2,114 | $1,448 | 46 % | 48 % | 1 % | Neutral |
Washington, DC | $2,987 | $2,262 | 32 % | 58 % | -39 % | Seller |
Philadelphia, PA | $2,118 | $1,769 | 20 % | 36 % | -46 % | Seller |
Miami, FL | $3,425 | $2,484 | 38 % | 23 % | -4 % | Buyer |
Atlanta, GA | $2,151 | $1,668 | 29 % | 56 % | -3 % | Buyer |
Boston, MA | $3,736 | $2,975 | 26 % | 31 % | -46 % | Strong seller |
Phoenix, AZ | $2,254 | $1,539 | 46 % | 57 % | -8 % | Neutral |
San Francisco, CA | $3,931 | $2,763 | 42 % | 46 % | -3 % | Strong seller |
Riverside, CA | $3,001 | $2,301 | 30 % | 29 % | -25 % | Seller |
Detroit, MI | $1,488 | $1,367 | 9 % | 27 % | -34 % | Neutral |
Seattle, WA | $3,125 | $2,081 | 50 % | 56 % | -23 % | Seller |
Minneapolis, MN | $2,303 | $1,535 | 50 % | 56 % | -27 % | Seller |
San Diego, CA | $3,976 | $2,725 | 46 % | 43 % | -33 % | Seller |
Tampa, FL | $2,356 | $1,839 | 28 % | 42 % | 7 % | Buyer |
Denver, CO | $2,835 | $1,790 | 58 % | 66 % | 4 % | Neutral |
Baltimore, MD | $2,209 | $1,742 | 27 % | 42 % | -47 % | Seller |
St. Louis, MO | $1,506 | $1,241 | 21 % | 29 % | -44 % | Seller |
Orlando, FL | $2,403 | $1,784 | 35 % | 49 % | 17 % | Neutral |
Charlotte, NC | $2,045 | $1,592 | 28 % | 60 % | 18 % | Neutral |
San Antonio, TX | $1,827 | $1,277 | 43 % | 53 % | 23 % | Buyer |
Portland, OR | $2,608 | $1,690 | 54 % | 54 % | -19 % | Seller |
Sacramento, CA | $2,683 | $1,984 | 35 % | 38 % | -30 % | Seller |
Pittsburgh, PA | $1,577 | $1,381 | 14 % | 32 % | -32 % | Buyer |
Cincinnati, OH | $1,968 | $1,354 | 45 % | 24 % | -33 % | Neutral |
Austin, TX | $2,269 | $1,512 | 50 % | 61 % | 34 % | Neutral |
Las Vegas, NV | $2,172 | $1,525 | 42 % | 42 % | -18 % | Neutral |
Kansas City, MO | $1,601 | $1,312 | 22 % | 39 % | -36 % | Neutral |
Columbus, OH | $1,866 | $1,327 | 41 % | 38 % | -20 % | Neutral |
Indianapolis, IN | $1,714 | $1,341 | 28 % | 46 % | -16 % | Buyer |
Cleveland, OH | $1,509 | $1,184 | 27 % | 26 % | -53 % | Seller |
San Jose, CA | $4,259 | $3,038 | 40 % | 58 % | -35 % | Strong seller |
Nashville, TN | $2,258 | $1,671 | 35 % | 60 % | -11 % | Neutral |
Virginia Beach, VA | $2,059 | $1,535 | 34 % | 33 % | -43 % | Seller |
Providence, RI | $2,964 | $1,927 | 54 % | 16 % | -62 % | Seller |
Jacksonville, FL | $1,957 | $1,503 | 30 % | 49 % | 14 % | Buyer |
Milwaukee, WI | $1,536 | $1,275 | 20 % | 37 % | -27 % | Neutral |
Oklahoma City, OK | $1,466 | $1,105 | 33 % | 30 % | -3 % | Neutral |
Raleigh, NC | $2,061 | $1,494 | 38 % | 65 % | -13 % | Neutral |
Memphis, TN | $1,573 | $1,199 | 31 % | 32 % | -1 % | Buyer |
Richmond, VA | $2,037 | $1,558 | 31 % | 49 % | -43 % | Seller |
Louisville, KY | $1,588 | $1,266 | 25 % | 42 % | -27 % | Buyer |
New Orleans, LA | $1,830 | $1,456 | 26 % | 13 % | 61 % | Buyer |
Salt Lake City, UT | $2,426 | $1,530 | 59 % | 62 % | -5 % | Seller |
Hartford, CT | $2,541 | $1,768 | 44 % | 29 % | -69 % | Strong seller |
Buffalo, NY | $1,684 | $1,262 | 33 % | -46 % | Strong seller | |
Birmingham, AL | $1,464 | $1,225 | 20 % | 31 % | -14 % | Neutral |
*Table ordered by market size
1 The Zillow® market report is a monthly overview of the national and local real estate markets. The report is compiled by Zillow Research. For more information, visit zillow.com/research .
About Zillow Group:
Zillow Group, Inc. ( Nasdaq : Z and ZG ) is reimagining real estate to make home a reality for more and more people. As the most visited real estate website in the United States , Zillow and its affiliates help people find and get the home they want by connecting them with digital solutions, dedicated partners and agents, and easier buying, selling, financing, and renting experiences.
Zillow Group's affiliates, subsidiaries and brands include Zillow®, Zillow Premier Agent®, Zillow Home Loans?, Zillow Rentals®, Trulia®, Out East®, StreetEasy®, HotPads®, ShowingTime+?, Spruce®, and Follow Up Boss®.
All marks herein are owned by MFTB Holdco, Inc., a Zillow affiliate. Zillow Home Loans, LLC is an Equal Housing Lender, NMLS #10287 ( www.nmlsconsumeraccess.org ). © 2025 MFTB Holdco, Inc., a Zillow affiliate.
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FAQ**
How is Zillow Group Inc. ZG adapting its strategies in response to single-family rents reaching a record high, significantly above apartment rental prices?
What factors does Zillow Group Inc. ZG believe are contributing to the 41% increase in single-family rents compared to the 26% rise in multifamily rents since the pandemic?
Considering the rising concessions on rental listings, how is Zillow Group Inc. ZG projecting the future rental market dynamics for both single-family homes and apartments?
With the current inventory trends noted by Zillow Group Inc. ZG, what implications might there be for single-family home construction in the upcoming years?
**MWN-AI FAQ is based on asking OpenAI questions about Zillow Group Inc. (NASDAQ: ZG).
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