Like the Temperatures, Single-Family Rental Home Prices Are Falling
Single-family home renters have been on a wild ride full of unpredictable price surges during the past few years. At various points, many would have gladly moved into a haunted house as long as the amenities were adequate and the rent was reasonable. Fortunately, there’s no longer any need to take on a transparent roommate, says Dwellsy CEO and cofounder Jonas Bordo.
“September’s data is in, and asking rent for three-bedroom single-family rental homes (SFRs) dropped 0.3 percent, or $5, since August,” 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).
“Five bucks may not sound like much, but since we’d normally expect to see prices climbing to their seasonal peak this time of year, a dip is significant,” he adds.
That’s the good news. Here’s the slightly less good news: Year-over-year rent comparisons show a price increase of 5.3 percent, or $95, since last September. Still, points out Bordo, that’s not too far out of line with inflation—and it feels downright reasonable when you consider that three-bedroom SFR rent has risen 24.6 percent since January 2021.
Yet if many markets have received a rent-trend treat, others are undoubtedly feeling tricked. In some areas, SFR prices are scarily expensive, either because of increased demand or a consistently high 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 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.
Top Ten Most Expensive Large Cities for Three-Bedroom Single-Family Home Rentals
If your city was on this list last month, bad news: It’s still one of the most expensive areas for SFRs. While a few markets have moved up or down several spots, the top four cities—all of which are in California—haven’t budged in the rankings.
“In first place, the Los Angeles metro area has a median asking rent of $3,993,” says Bordo. “But that price has dropped seven whole dollars since last month, so hey…progress?”
Another silver lining is the fact that the highest year-over-year rent increase is Boston’s 4.2 percent. Remember, nationwide asking rent for three-bedroom SFRs rose 5.3 percent since September 2022. (“In fact, all of the markets on this list except Boston have rent growth rates at or below current rates of inflation,” Bordo notes.)
“Due to high mortgage rates and sluggish home sales, many people are choosing to rent while they wait for a more opportune time to become owners,” Bordo concludes. “Ergo, demand for single-family rental homes is likely to remain high as we move through autumn. That said, it’s normal for rents to decline a bit as the summer moving season draws to a close, so who knows? Next month might bring even more good news for SFR-dwellers.”
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About Jonas Bordo:
Jonas Bordo is the coauthor, along with Hannah Hildebolt, of 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. 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 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.
