Competition for housing makes renting more costly
It seems renting — particularly for single-family homes — is on the rise. And according to analysis from one industry player, increased demand for rental units means higher cost for tenants.
What goes up doesn’t always come down
Analysis from real estate marketplace Zillow shows high demand, low supply and virtually nonexistent construction starts are driving up rents on single-family properties.
“Rental houses have been in high demand since the housing market crashed, but a lack of supply has made renting those homes more expensive,” Zillow reported. “The median monthly rent for single-family homes is rising faster than the median monthly rent for apartments.
The median rent on single-family homes has risen 1.3 percent over the last year, clocking in at $1,404 per month. Median apartment rents rose just 0.5 percent for the same period.
Top cities for rent increases
Some markets in particular are seeing huge single-family rent growth. In Portland, Oregon, for example, rents on single-family homes have increased 4.5 percent over the year. But apartment rents in the city? Those are actually falling.
Other cities with notable jumps in single-family rent costs include Los Angeles (4 percent increase over the year); Atlanta (3.5 percent); Seattle (5.4 percent); Minneapolis (3.9 percent); San Diego (4.3 percent), Orlando (3.2 percent); Nashville (3 percent); Louisville, Kentucky (4.1 percent); Salt Lake City, Utah (5 percent: and Charlotte, North Carolina (3.1 percent).
The reason behind the staggering jump in rents is a combination of increasing demand, strapped supply and a lack of construction.
“There are fewer single-family homes to rent than a decade ago,” Zillow reported. “When the housing market crashed, investors scooped up many single-family homes lost to foreclosure and turned them into rentals. Almost 20 percent of all single-family homes across the U.S. were rented in 2016, up from 13.5 percent 10 years prior.”
What are today’s mortgage rates?
Fortunately, mortgage rates are at their lowest point all year, so renting isn’t the only option for those in need of single-family properties. See what rate you qualify for and lock in your quote now.