- In December, single-family rental (SFR) prices reached an average of $2,174, 20% above multifamily rents, the highest gap since 2018.
- SFR rents rose 4.4% YoY, compared to just 2.4% for multifamily. Over the past 5 years, SFR rents shot up 40.6%, while multifamily rents grew 26.2%.
- Despite falling rents in some major metros, SFR rents rose YoY in the 50 largest US cities.
- A growing number of rentals offer concessions, with 40% of SFR listings offering some form of rent relief.
Single-family rental (SFR) prices are still outpacing multifamily rents, with the gap reaching a record 20% in December, per GlobeSt.
The demand for SFRs remains high, fueled by high homeownership hurdles, like high upfront costs and too-high mortgage rates. Meanwhile, multifamily rents grew slower, highlighting shifting rental dynamics nationwide.
SFR’s Steady Climb
According to Zillow, the typical asking rent for a single-family home in December was $2,174—up 4.4% YoY and 40.6% over the last five years. Multifamily rents grew just 2.4% YoY and 26.2% over five years, revealing the growing gap between the two rental sectors.
The rental market for single-family homes is seeing significant upward pressure, in part due to the limited availability of homes for purchase. As of December, the rent for a typical SFR was 20% higher than for multifamily properties, a gap not seen since Zillow began tracking these figures in 2018.
Regional Breakdown
While SFR rents were lower Month over Month in 20 major metros, including Salt Lake City, Boston, and Denver, they still reported YoY growth in all 50 of the largest US metro areas. Cities like Hartford, St. Louis, Cleveland, and Indianapolis led the charge in annual rent growth.
In Pittsburgh, more single-family construction helped ease the rent gap between SFR and multifamily homes. In December, single-family rents were just 14.2% higher than multifamily rents, well below the national average.
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Still Feeling The Pressure
Despite the overall growth in SFR rents, the rental market faces challenges. Vacancy rates for single-family rentals climbed to 6% in Q3, the highest level since early 2018. This, along with an influx of new multifamily units, creates pressure on single-family rental prices.
Renters are seeing more concessions, as 2 in 5 SFR listings offered rent relief. This trend, which has grown in 48 major markets, reflects a shift in rental strategies as landlords adjust to market conditions.
Looking Ahead
As we head into 2025, the future of SFR rent growth remains uncertain. Much depends on the direction of mortgage rates and the pace of new single-family construction. With limited new developments on the horizon, the SFR segment is expected to remain competitive.
The dynamics of single-family rentals are expected to remain tight, with potential relief through concessions as landlords adjust to changing demand.
