Would-be home buyers priced out of the sales market are finding little consolation when they turn instead to the single-family rental market.
Prices are soaring there as well. Asking rents for houses rose nearly 13% for the year to date through July, the highest annual increase in the past five years as tracked by real-estate data company Yardi Matrix, which analyzed professionally managed properties.
The sharp rise partly reflects increasing demand from people who can’t afford to buy homes as well as city-dwellers who moved to the suburbs to rent during the pandemic. Meanwhile, the supply of new houses also continues to trail historical levels relative to population growth, and builders in some places remain constrained by zoning laws and available land.
Price increases are more moderate for single-family tenants renewing their leases, said Haendel St. Juste, a real-estate securities analyst at Mizuho Securities USA. “You’ve got to be careful in this industry. You can’t be perceived as gouging.”
Apartment asking rents also have risen, but at a slower pace: 8.3% for the year to date through July, Yardi Matrix said. The difference partly reflects weaker demand in downtowns that lost population after Covid-19 hit, although those markets have rebounded in recent months.
