From March to April, asking rents for three-bedroom, single-family rentals rose 2.2% after months of slow price declines. But it may be just a normal seasonal increase.
WASHINGTON – First, the bad news: After enjoying an all-too-brief lull in rising rents, single-family home rental (SFR) prices are once again trending upward.
But according to Dwellsy CEO and cofounder Jonas Bordo, there’s a little bit of good news (okay, mitigating news) to go along with it: Rent levels generally follow seasonal cycles, and data nerds like Bordo expect them to rise along with the temperatures.
“From March to April 2023, asking rent for three-bedroom SFRs rose 2.2%, or $40,” says Bordo, coauthor along with Hannah Hildebolt of Everything You Need to Know About Renting But Didn’t Know to Ask: All the Insider Dirt to Help You Get the Best Deal and Avoid Disaster. “The question is: Is this the first sign of a typical April-through-October rent increase or a one-off variation from the moderation we’ve seen in recent months?”
Obviously, renters would (enthusiastically!) vote for the latter option. But Bordo points out that a return to normal patterns wouldn’t be a bad thing, especially for SFR dwellers. Since January 2021, prices for three-bedroom SFRs have increased by an eye-popping 23.6%, and during that time, some of the sharpest surges have occurred in months when we’d typically expect prices to decrease.
“By returning to a normal seasonal rent cycle, I think we’d see fewer steep spikes in rent, and price increases would come at predictable times,” he explains. “I’m cautiously optimistic that we’re heading in this direction as we move further away from the unpredictable price fluctuations we saw during the pandemic. It’s encouraging that year-over-year rent for three-bedroom SFRs rose ‘just’ 6.1%, which is more or less in line with inflation.”
That said, rent growth in some markets has outpaced the national average. And in other places, asking rent for SFRs is just plain expensive no matter what the economy is doing.
Bordo believes that providing accurate and timely rental data is a crucial service for renters, landlords, cities, and organizations connected to the rental industry. To that end, Dwellsy regularly mines its 13+ million residential rental listings for statistics and data. Because the rental platform allows landlords to post listings free of charge, it has a pool of data that’s more diverse and more representative of the true rental landscape than that of pay-to-play listing services. Each month, Dwellsy breaks down this data regionally across 250 U.S. markets.
“Without current data, it’s difficult for renters to accurately gauge developing trends, determine affordability in their area, and plan for the future,” says Bordo.” In compiling this list of most expensive cities for single-family home rentals, we’ve focused in on three-bedroom homes because they are by far the most common rental home type.”
Here, Bordo shares which cities are currently most expensive for single-family home renters:
Prospectors once flocked to California in hopes of finding gold and striking it rich. These days, you’ll need a considerable amount of cash just to live there in there first place, especially if you’re hoping to rent a home. Five of the 10 cities on this list including the top four are in the Golden State.
“The Los Angeles area tops the list with a median asking rent of $4,200 a month, which is up 6.3% from April 2022,” says Bordo. “While four of the cities on this list are at least $1,000 less expensive than that, all of them are still pricey.”
If you thought you’d dodge California’s high home rental prices by living in a smaller city, Bordo must regretfully burst your bubble. Six of the ten small markets on this list are located there.
“As a California resident myself, I’m a fan of the state overall, but there’s no denying that SFR rents here will take a big chunk out of your budget,” he comments. “That said, April’s most expensive smaller market for SFRs is in another state known for its sun and beaches. Asking rent in Naples-Marco Island, Florida is $3,698, which is up 5.7% since April 2022.”
He adds, “The Santa Barbara-Santa Maria-Goleta, California area stands out on this list for having the only year-over-year rent increase in the double digits: 14.3%. Still, their rent growth numbers are lower than we’ve seen in a while, suggesting that this market is cooling while absorbing past rent increases.”
“As we move into the summer months, I’m curious to see if SFR rent continues to rise by a moderate amount,” concludes Bordo. “Remember, if that’s the case, it reflects a normal and expected seasonal trend.”
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