Photo: Robert Clark
The US rental market was a very mixed bag in May.
Median rents were up in the majority of the country’s largest housing markets, but the rate of appreciation began to slow in some of the pricier rental markets, according to a newly released report by the listing site Zillow.
“Over the past two years, rent growth slowed across the country as new apartments hit the market and renters with the financial means to do so increasingly became homeowners,” Zillow Senior Economist Aaron Terrazas says in the digital release.
Nationally, the median rent rose 2.1 percent year-over-year to $1,440 in May. Comparatively, national median rents rose at an annual growth rate of 0.7 percent in May 2017.
Across the country, rent growth has been holding steady at between a 2 and 3 percent annual growth appreciation rate for the past 11 months.
Rents appreciated at a faster rate compared to last year in 75 percent of the largest housing markets in May.
Pittsburgh, PA, Detroit, MI and Houston, TX recorded the largest gains in annual rent growth in May. The median rent in all three of these metros was on the decline at this time last year, but is now appreciating over 1 percent annually.
Yet, in some of the country’s priciest rental markets, the rate of acceleration slowed in May.
In Seattle, WA annual rental price appreciation slowed from nearly 6 percent last year to a 3.3 percent annual growth rate in May. Seattle’s annual rent growth has been among the highest in the country over the last several years.
Los Angeles, CA, Portland, OR and Boston, MA all recorded similar decelerations in annual price appreciation in May.
In New York City, annual rent growth rose 1 percent from the same time last year in May, when rents declined 1.9 percent annually.
“The slowdown in rent growth was most prominent in the markets that moved most quickly to add units – either because it was easy to build or because of local demands,” Terrazas says.
Rent appreciation has “perked back up” nationwide and Terrazas adds that it remains well within “a long-term sustainable range.”
With rents on the rise, saving for a downpayment on a home — the biggest hurdle to homebuying — is becoming increasingly more difficult for many renters. And, coupled with rising interest rates, the dream of owning a home is slipping away from many Americans who simply can’t afford to buy in today’s market.
Click here to read the entire report.