The Rental Market Slowdown is Leveling Off (June 2024 Rental Market Report)
The months long slowdown in the rental market appears to be leveling off as the busy summer season kicks off. Rents are growing at their fastest annual pace in nearly a year — though the margins are slim — and concessions offered by landlords and property managers have flattened after reaching a three-year high this spring.
Annual rent growth accelerated in June. The typical rent across the U.S. is now $2,054, according to the Zillow Observed Rent Index. That is up 3.5% from last year, the fastest annual growth since last July.
Monthly rent growth was about normal for this time of year. Rents grew 0.5% month over month in June, only slightly below the pre-pandemic average month-over-month change for June of 0.6%.
The share of rental listings on Zillow offering a concession remained steady at 33% in June, down from 33.6% two months earlier, which was a three-year high. Fewer concessions — sweeteners such as free weeks of rent or free parking offered as an incentive — can be read as an early signal that landlords and property managers are more confident in being able to quickly fill their vacant units.
A portion of this rental market reheating is likely because of seasonal factors. Renters tend to move more often in the summer because of things like school schedules, new jobs and the end of yearlong leases signed the summer before. More renters shopping for a new home can make it more challenging for each one to find an open unit.
Rents
- Typical U.S. rent is $2,054 in June, up 0.5% month over month. The pre-pandemic average month-over-month change for this time of year is 0.6%.
- Since the beginning of the pandemic, rents have increased by 32.8%.
- Rents are now 3.5% higher than last year.
- Rents are up from year-ago levels in 48 of the 50 largest metro areas. Annual rent increases are highest in Hartford (7.8%), Cleveland (7.2%), Louisville (6.8%), Providence (6.3%) and Milwaukee (5.7%).
Single-Family Rents
- Typical rent for single-family homes is $2,288 in June, up 0.4% month over month. Since the beginning of the pandemic, single-family rents have increased by 39.6%.
- Single-family rents are now 4.7% higher than last year.
- Single-family rents fell, on a monthly basis, in four major metro areas: Buffalo (-1.6%), Austin (-0.1%), Hartford (-0.1%) and New Orleans (-0.03%).
- Single-family rents are up from year-ago levels in 49 of the 50 largest metro areas. Annual single-family rent increases are highest in Cleveland (8.9%), Milwaukee (7.7%), Cincinnati (7.6%), Louisville (7.5%) and St. Louis (7.2%).
Multifamily Rents
- Typical rent for multifamily homes is $1,906 in June, up 0.6% month over month. Since the beginning of the pandemic, multifamily rents have increased by 26.7%.
- Multifamily rents are now 2.7% higher than last year.
- Multifamily rents fell, on a monthly basis, in two major metro areas: Jacksonville (-0.2%) and Phoenix (-0.04%).
- Multifamily rents are up from year-ago levels in 40 of the 50 largest metro areas. Annual multifamily rent increases are highest in Hartford (8.4%), Providence (6.7%), Louisville (6.4%), Cleveland (6.3%) and Buffalo (5.7%).
Rent Concessions
- 33% of rentals on Zillow offered at least one concession in June.
- The share of rental listings offering a concession decreased by 0.04 percentage points (ppts) month over month in June.
- The share of rental listings offering a concession increased by 8.1ppts from last year.
- The share of rentals offering a concession is lower, on a monthly basis, in 27 major metro areas. The largest monthly drops are in San Jose (-6.9ppts), Baltimore (-4.9ppts), Birmingham (-4.8ppts) Las Vegas (-3.6ppts), and Pittsburgh (-2.8ppts).
- The share of rentals offering a concession is higher, on a monthly basis, in 22 major metro areas. The largest monthly increases are in Kansas City (4.9ppts), Raleigh (3.4ppts), San Antonio (3ppts), Virginia Beach (2.4ppts), and Indianapolis (2.4ppts).
- Rent concessions are up from year-ago levels in 49 of the 50 largest metro areas. The annual increase is highest in Jacksonville (20.5ppts), Charlotte (18.2ppts), San Antonio (15.5ppts), Atlanta (15ppts), and Tampa (13.8ppts).
Rent Affordability
- The median household would spend 30% of its income on a typical rental in June.
- Rent affordability worsened by 0.1ppts month over month in June. The pre-pandemic share of median household income spent on rent was 28.4%.
- The most affordable metro areas for rents are Minneapolis (20.4% of median income spent on typical rent), Salt Lake City (20.5%), St. Louis (20.9%), Austin (21.3%), and Raleigh (21.3%).
- The least affordable metro areas for rents are Miami (43.4%), New York (42.1%), Los Angeles (37.4%), San Diego (34.2%), and Riverside (33.8%).
