Single-Family Homes Drive Rental Rate Growth

Overall, rental rates in the U.S. have risen steadily over the past month, primarily due to the increase in single-family rents. According to housing market platform Zillow, typical rents grew by 0.2% month-over-month—and by 3.5% year-over-year—to $1,968 per month. At the same time, single-family rents grew by 4.4% year-over-year to $2,179 per month. This is now 20% higher than the typical multifamily asking rent. Without significant mortgage rate drops, the demand for single-family rentals is expected to remain strong throughout the remainder of the year, and the ongoing shortage of new single-family construction will only likely add to this demand. 

Conversely, the multifamily sector’s progress in apartment construction is helping to keep costs lower. Although the pace of newly built apartments exceeds the previous record levels seen during the 1970s construction boom, as rent softens, the rate at which apartments are being built is slowing down. Currently, the typical asking rent for multifamily homes stands at $1,820, reflecting a 0.2% increase from the previous month. Read more