As the average price of single-family homes in the United States continues to rise, more consumers are choosing the rental route. But they’re not just renting apartments. Many are renting single-family homes.
And because of this, the single-family home rental market is thriving today.
More evidence of this comes from Rentometer’s third quarter 2024 National Single-Family Rentals Report. According to this report, the prices for single-family home rentals are continuing their steady growth, increasing 3% on a year-over-year basis in the third quarter of this year and jumping 0.5% from the second quarter of 2024.
Rentometer points to both rising home prices and higher mortgage interest rates as the fuel behind this growth. As more would-be homebuyers struggle to scrape together enough money for larger down payments and face bigger monthly mortgage bills thanks to higher interest rates, a larger share of these potential buyers are choosing to rent single-family homes.
This gives these renters some of the amenities of a single-family home — such as a backyard and more space — without the higher mortgage payments that are more common today.
The National Association of REALTORS reported that single-family home sales fell by 4.2% in August of 2024 compared to the same month a year earlier. The reason? Many potential buyers delayed their purchases because buying a single-family home is so expensive today.
Regionally, the Midwest and Northeast saw the largest annual growth in single-family rental prices, each topping 9%, while the Southeast and Southwest experienced more modest growth, at 2.2% and 3%, respectively, according to Rentometer.
Rentometer also tracked those cities with populations of more than 250,000 that saw the highest annual growth in single-family home rents. Buffalo, New York, topped this list, with single-family home rents jumping by an average of 29% in the third quarter when compared to the same quarter in 2024.
But in the Midwest, Milwaukee also saw a big jump. According to Rentometer, the average cost to rent a single-family home increased 13% in the Milwaukee market during the third quarter when compared to the same period a year earlier.
Among mid-sized cities with populations from 100,000 to 250,000, Kansas City, Kansas, saw its average single-family home rental price jump 16% on a year-over-year basis while rents increased by 15% in Rockford, Illinois.
The Midwest also boasted some of the most affordable cities for single-family home rentals, according to Rentometer’s numbers.
Toledo, Ohio, is the most affordable large city for renting single-family homes, according to the study. The average rent for a three-bedroom home in Toledo was $1,214 in the third quarter of 2024, up 3% from last year.
Wichita, Kansas ($1,339), and Detroit, Michigan ($1,353), ranked as the second and third most affordable large cities, respectively, though rent in Detroit increased at a faster pace than the national average (+7% Y-o-Y).
