Rental affordability reaches four-year high
Rent growth cools and concessions from landlords rise to new record levels
- Rental affordability is better than it's been in four years, requiring 28.4% of median household income nationwide.
- Landlords are offering concessions on 37.3% of rentals on Zillow, a record high for September.
- Single-family rents are up 3.2% year over year, a record low in Zillow records.
Builders responded to a surge of demand for housing during the pandemic, finishing more multifamily units in 2024 than any year in a half-century. Builders in the South, where there are fewer zoning restrictions, reacted more quickly and efficiently to renters' needs, helping create pockets of affordability.
"Markets that built more — and faster — are seeing that investment pay off with more renters able to comfortably afford an apartment," said Orphe Divounguy, senior economist at Zillow. "It's a reminder that housing costs can be tamed when policy allows supply to keep up with demand."
National rent growth in multifamily units on Zillow eased to 1.7% over last year in September — the second-lowest annual growth seen since 2021. A weaker labor market is also contributing to slower rent growth this year: New jobs are highly important for residential mobility.
Zillow's new rent market dashboard shows falling apartment rents are concentrated in the
Apartment rents are falling fastest year over year in
Even single-family rents – which have significantly outperformed apartments in recent years – are feeling headwinds. September's 3.2% year-over-year rise in single-family rent is the smallest annual growth in Zillow records that start in 2016.
Freebies for renters rise
In recent years rental managers have turned to concessions, such as free months of rent or free parking, instead of lowering rents. Now 37.3% of rentals on Zillow offer some sort of freebie — a new record high for September and up from 14.4% in 2019.
Those concessions likely will continue to rise; they typically peak in winter or early spring. As concessions become the norm, property managers may need to consider price cuts, particularly as the year winds down. Competition among prospective renters tends to fall off over the cooler winter months.
Affordability improves nationwide as rents ease
Cooler growth and even declining rents in some rental markets are contributing to better nationwide affordability than renters have seen in four years. A typical rental now requires 28.4% of the median household income nationally, down slightly from 28.8% a year ago and below the 30% threshold where housing becomes a financial burden.
Rent affordability improved over the past year in 38 of the 50 largest
|
Metro Area* |
Zillow |
ZORI |
ZORI as |
ZORI as |
Share of |
ZORI |
ZORI |
|
|
|
2.3 % |
28.4 % |
28.8 % |
37.3 % |
1.7 % |
3.2 % |
|
|
|
5.2 % |
40.6 % |
40.0 % |
18.2 % |
5.3 % |
4.1 % |
|
|
|
2.4 % |
35.5 % |
35.9 % |
27.6 % |
1.6 % |
3.9 % |
|
|
|
6.0 % |
26.8 % |
26.2 % |
22.6 % |
6.0 % |
5.5 % |
|
|
|
0.1 % |
21.8 % |
22.5 % |
58.9 % |
-0.6 % |
0.9 % |
|
|
|
0.5 % |
23.4 % |
24.2 % |
47.9 % |
-0.1 % |
1.4 % |
|
|
|
1.4 % |
22.0 % |
22.5 % |
53.4 % |
0.3 % |
3.6 % |
|
|
|
3.7 % |
24.2 % |
24.2 % |
30.4 % |
3.1 % |
4.2 % |
|
|
|
0.8 % |
38.6 % |
39.7 % |
25.3 % |
1.5 % |
1.0 % |
|
|
|
2.5 % |
24.1 % |
24.3 % |
55.9 % |
1.4 % |
3.8 % |
|
|
|
2.9 % |
29.7 % |
29.9 % |
31.0 % |
2.7 % |
4.1 % |
|
|
|
-0.8 % |
23.0 % |
24.1 % |
55.6 % |
-2.2 % |
1.1 % |
|
|
|
5.6 % |
27.4 % |
26.9 % |
33.9 % |
5.6 % |
3.6 % |
|
|
|
2.0 % |
31.7 % |
32.2 % |
28.5 % |
1.5 % |
2.0 % |
|
|
|
3.0 % |
23.3 % |
23.4 % |
24.1 % |
2.3 % |
3.2 % |
|
|
|
2.6 % |
22.6 % |
22.7 % |
51.1 % |
2.0 % |
3.3 % |
|
|
|
3.9 % |
19.9 % |
19.9 % |
41.3 % |
3.3 % |
4.5 % |
|
|
|
1.9 % |
32.0 % |
32.6 % |
37.6 % |
1.3 % |
2.7 % |
|
|
|
1.8 % |
31.2 % |
31.7 % |
46.3 % |
1.4 % |
2.4 % |
|
|
|
-2.1 % |
20.9 % |
22.2 % |
64.8 % |
-3.4 % |
1.2 % |
|
|
|
3.0 % |
22.9 % |
23.0 % |
38.9 % |
1.9 % |
4.1 % |
|
|
|
4.0 % |
20.1 % |
20.0 % |
20.0 % |
3.0 % |
5.5 % |
|
|
|
0.3 % |
28.2 % |
29.1 % |
50.3 % |
-0.8 % |
1.8 % |
|
|
|
1.2 % |
24.0 % |
24.6 % |
62.7 % |
-0.6 % |
3.7 % |
|
|
|
-1.1 % |
22.2 % |
23.2 % |
52.8 % |
-2.3 % |
0.9 % |
|
|
|
1.2 % |
21.7 % |
22.2 % |
45.8 % |
0.4 % |
2.7 % |
|
|
|
2.0 % |
26.6 % |
27.1 % |
31.0 % |
1.6 % |
2.1 % |
|
|
|
3.9 % |
22.5 % |
22.4 % |
24.4 % |
3.0 % |
5.4 % |
|
|
|
3.4 % |
21.9 % |
22.0 % |
19.2 % |
2.6 % |
4.8 % |
|
|
|
-3.3 % |
18.2 % |
19.4 % |
60.4 % |
-4.7 % |
0.0 % |
|
|
|
0.2 % |
25.5 % |
26.4 % |
48.3 % |
0.0 % |
0.6 % |
|
|
|
4.5 % |
21.1 % |
20.9 % |
32.7 % |
3.7 % |
5.3 % |
|
|
|
2.7 % |
22.4 % |
22.7 % |
42.7 % |
2.2 % |
3.9 % |
|
|
|
3.5 % |
21.4 % |
21.5 % |
41.8 % |
2.2 % |
5.6 % |
|
|
|
4.9 % |
23.2 % |
22.9 % |
24.4 % |
4.2 % |
5.4 % |
|
|
|
3.7 % |
25.3 % |
25.4 % |
42.7 % |
3.3 % |
3.8 % |
|
|
|
0.6 % |
23.5 % |
24.3 % |
61.7 % |
-0.6 % |
2.8 % |
|
|
|
4.2 % |
25.3 % |
25.2 % |
29.8 % |
4.0 % |
4.0 % |
|
|
|
4.6 % |
28.8 % |
28.5 % |
12.8 % |
4.8 % |
4.5 % |
|
|
|
1.1 % |
24.8 % |
25.5 % |
46.9 % |
0.0 % |
2.4 % |
|
|
|
4.0 % |
20.8 % |
20.8 % |
30.0 % |
3.7 % |
5.9 % |
|
|
|
3.1 % |
21.8 % |
21.9 % |
28.6 % |
2.3 % |
3.5 % |
|
|
|
0.7 % |
19.7 % |
20.2 % |
61.5 % |
-0.7 % |
2.1 % |
|
|
|
1.9 % |
25.7 % |
26.2 % |
37.6 % |
-0.2 % |
3.2 % |
|
|
|
3.9 % |
22.2 % |
22.2 % |
47.0 % |
3.2 % |
4.8 % |
|
|
|
2.9 % |
21.9 % |
22.1 % |
39.1 % |
1.6 % |
4.9 % |
|
|
|
0.6 % |
29.3 % |
30.3 % |
18.1 % |
-0.4 % |
2.3 % |
|
|
|
0.1 % |
19.5 % |
20.2 % |
59.2 % |
-0.6 % |
1.3 % |
|
|
|
3.8 % |
23.2 % |
23.2 % |
24.5 % |
3.6 % |
3.8 % |
|
|
|
3.0 % |
21.9 % |
22.1 % |
6.2 % |
3.1 % |
3.7 % |
|
|
|
2.7 % |
22.4 % |
22.6 % |
34.0 % |
0.0 % |
5.2 % |
|
|
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|
*Table ordered by market size |
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SOURCE Zillow
