Is the Single-family Home Rental-Price Coaster FINALLY Slowing Its Roll?
Believe it or not, Dwellsy’s latest data report shows that the median asking rent for single-family homes hasn’t budged since last month. (But these 20 expensive cities didn’t get the memo.)
Los Altos, CA (June 2023)—For over two years, many single-family home (SFR) renters have felt like they were riding a roller coaster—blindfolded. Rent prices have experienced steep climbs peppered with just enough unexpected dips and flat stretches to (temporarily) justify loosening one’s white-knuckle grip on the safety bar. Well, it may finally be time to exit the ride. Jonas Bordo, CEO and cofounder of Dwellsy, says SFR prices flattened out in May (but just to be safe, keep your arms and legs inside the vehicle until the ride has come to a complete stop).
“From April to May 2023, median asking rent for three-bedroom SFRs stayed exactly the same: $1,875,” 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 (Matt Holt, August 2023, ISBN: 978-1-6377439-2-8, $21.95). “Year-over-year rent was up 4.5 percent, or $80, since May 2022.”
An $80-a-month increase might seem fairly significant; after all, it adds up to hundreds of dollars of rent money over the course of a year. But Bordo points out that the annual rent increase of 4.5 percent is trailing just below inflation.
“To put into perspective just how significant this is, SFR rent has increased by a whopping 23.6 percent since Dwellsy began tracking this data in January 2021,” says Bordo. “May 2022 marked the point when rent growth began to slow materially for this property type, at which point the year-over-year increase was 12.9 percent. Relatively speaking, today’s SFR asking rent is looking pretty darn reasonable.”
Of course, that’s taking the broad view. Asking rent in some markets has far outpaced the national average, whether as a result of high demand or a reflection of the overall cost of living.
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 14+ 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.”
For a more detailed look at Dwellsy’s rent price analysis methodology, see this article.
Here, Bordo shares which cities are currently most expensive for single-family home renters:
Top Ten Most Expensive Big Cities for Three-Bedroom Single-Family Home Rentals
When it comes to the cost of a three-bedroom SFR, the West Coast easily beats the East Coast. Seven of the ten cities on this list are west of the Mississippi, and five are in California alone.
“As it has for a while, the Los Angeles area tops the list with a median asking rent of $4,099 a month,” says Bordo. “But on the bright side, that’s a year-over-year increase of just 2.5 percent, which is below the national average of 4.5 percent. Honolulu and the Boston area stand out with annual rent percent increases in the double digits—my condolences if you rent there!”
This table shows which large cities had the most expensive May 2023 asking rent for three-bedroom single-family homes.
Asking rent in number one Naples-Marco Island, Florida, has risen by $2, increasing the price to a nice, round $3,700. (Two dollars may not sound like much, but it was enough to boost the Naples area from second to first place since last month!) The good news is, year-over-year rent in this market has decreased by 6.2 percent.
“Naples-Marco Island is the only market on this list that’s in the eastern half of the country,” Bordo comments. “Six of these cities are in California! Santa Barbara-Santa Maria-Goleta wins the prize for having the largest rise in rent, with prices 14.3 percent higher than they were in May 2022. Believe it or not, their growth numbers are lower than we’ve seen in a while, suggesting that the Santa Barbara market is stabilizing while absorbing past rent increases.”
This table shows which small cities had the most expensive May 2023 asking rent for three-bedroom single-family homes.
“I’m cautiously optimistic that the single-family home rental market is finally easing back into moderate, fairly predictable territory,” concludes Bordo. “I’m hopeful that we’ll see fewer steep spikes in rent, and that price increases will come at predictable times. Speaking of which, if you see rents for this property type rising a bit over the next few months, that’s normal. Since most people move during the warmer summer season, prices tend to reflect that demand.”
About Jonas Bordo:
Jonas Bordo is the coauthor, along with Hannah Hildebolt, of the upcoming book 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. He is the CEO and cofounder of Dwellsy, the free residential rental marketplace that makes it easy to find hard-to-find rentals. Prior to cofounding Dwellsy, Jonas was a senior executive at several leading real estate firms including Essex Property Trust and BentallGreenOak, and was with the Boston Consulting Group after graduating with his MBA from the University of Chicago Booth School of Business.
About the Book:
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 (Matt Holt, August 2023, ISBN: 978-1-6377439-2-8, $21.95) is available for pre-order from major online booksellers.
About Dwellsy:
Dwellsy is the renter’s marketplace: a comprehensive residential home rentals marketplace based on the radical concept that true, organic search in a free ecosystem creates more value than the pay-to-play model embraced by all of the current rental listing services. Dwellsy has more than 14 million residential rental listings—more than any legacy classifieds site—as well as the most diverse set of listings, including single family rentals, condos, and apartments. Dwellsy’s entirely different approach to residential rental listings focuses on presenting houses and apartments based on features renters need and want, not based on how much landlords pay to show their listings. Dwellsy investors include Frontier Ventures, Ulu Ventures, Blackhorn Ventures, Heroic Ventures, and the University of Chicago. For more information, please visit our newsroom or find your next home at Dwellsy.com.
