By Rob Sabo
Rental rates for single-family homes continue to rise in Los Angeles and Chicago, but the second- and third-largest cities in the United States are outliers for a nationwide slowdown in rental rates across major metropolitan markets and property types.
Rents for single-family properties increased just 1.4 percent in August, global property analytics firm Cotality reported on Oct. 23. That’s less than half of rental rate growth for the same month in 2024 and the lowest level recorded in the past 15 years, said Molly Boesnel, Cotality’s senior principal economist.
Rents in Chicago climbed 4.7 percent for the month, followed by Los Angeles at 2.8 percent and Philadelphia at 2.7 percent. However, rents were mostly stagnant in Houston (0.5 percent), Miami (0.1 percent) and declined in Dallas (0.6 percent).
“We’re seeing slower growth across price tiers and in many major metros,” Boesnel said.
“Atlanta, Philadelphia and Los Angeles continue to show stronger rent growth, with Los Angeles now only slightly above its pre-wildfire level from January. Los Angeles ranks second among the top 10 metros for rent growth, suggesting that local conditions such as recovery efforts, limited housing supply, and regional economic factors can still influence rental trends even as national price growth moderates.”
A glut of inventory is impacting rental rates across all property types in the Dallas-Fort Worth metroplex. Real estate brokerage Colliers said that more than 46,000 apartment units were under construction this past summer, with an additional 17,693 doors expected to come online in the next 12 months.
Rental rates across both high- and low-end properties showed modest growth, Cotality reported. Luxury properties were up by 1.6 percent from year-earlier figures, but that’s a sharp drop from the 3.3 percent year-over-year growth in August 2024. Rents at low-end properties inched upward just 1.1 percent, while rents for detached properties grew 1.5 percent and attached properties climbed 1 percent.
According to online real estate portal Zillow, the average rent for all room and property types in October stood at $2,045, a 1 percent dip from the same month last year. Median rents for a three-bedroom single-family home were just under $4,000 per month in the New York-New Jersey metropolitan region, followed by the Los Angeles-Long Beach-Glendale area at $3,926, and Washington, DC, at $3,453, Cotality said.
Renters occupied about 46.3 million houses and apartment units in the United States in the second quarter, the Federal Reserve Bank of St. Louis reported. Approximately 3.5 million rental units were vacant in the quarter, the St. Louis Fed noted—a 34-percent increase in vacancy from the same quarter three years ago.
A nationwide increase in home sales, due in part to a slight easing in mortgage rates following September’s 25 basis point rate cut by the Federal Reserve, is contributing to higher vacancy in rental properties and stagnant rental growth. Single-family home sales in September rose by 4.1 percent from year-earlier figures, the National Association of Realtors said.
