In the US, after strengthening in the first half of this year, single-family home rents began to slow down in July, which may be a sign that landlords will have to meet consumers halfway amid their difficulties. At the same time, Chicago led with a 5.1% increase in rent, and New York took second place with 3.7%, CNBC reports, writes UNN.
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According to the latest Cotality data, single-family home rents in the US rose by 2.3% in July compared to the same month last year, which is lower than the average increase of 3.1% a year earlier. Rent growth has now fallen below the lower bound of the 10-year average pre-pandemic growth, the publication writes.
"After a strong start to the year, single-family rent growth is clearly slowing," said Molly Bosel, senior lead economist at Cotality. "In July, we saw a general slowdown in year-over-year single-family rent growth across all metros and price tiers."
Rent growth in July in the US was only 0.2% compared to June, significantly lower than the historical average monthly growth in July of 0.7%. This is a noticeable change compared to the higher-than-usual monthly growth earlier this year.
"Even markets like Los Angeles, which were supported by demand after the wildfires, are now cooling. Chicago stands out as an exception, leading the country in rent growth amid limited supply and sustained demand," Bosel said.
Considering only the 10 largest metropolitan areas in the US, Chicago led with a 5.1% increase in rent, and New York took second place with 3.7%. They were followed by Philadelphia and Washington, D.C., and Los Angeles, although slowing, still rounded out the top five in rent growth.
Dallas and Miami performed the lowest out of the ten, with Miami seeing no rent growth at all. This compares to 2022, when pandemic-driven migration to the southern US led to a sharp 40% increase in annual rent in Miami.
Rent growth also slowed across all price categories. For luxury properties, the national average rent increased by 2.9% compared to last year, which is lower than the 3.2% annual increase recorded in July last year. The same trend was observed for rents in the low-price segment, which increased by 1.6% year-over-year in July, lower than the 2.8% increase in July 2024.
Over the past few years, single-family home rents in the US have grown significantly better than apartment rents, as a huge amount of supply has entered the multifamily market. Rents for detached homes have also been in high demand due to rapidly rising home sale prices. Families, who are typically buyers, preferred rental housing in areas with good schools.
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