Rent Growth Accelerates Going Into 2018
SEATTLE, Dec. 21, 2017 /PRNewswire/ -- After growing at a relatively slow pace for much of the 2017, rental prices have started to tick back up again, driven mainly by an increase in single-family rental prices, according to the November Zillow® Real Estate Market Reporti.
Median rent across the country rose 2.4 percent over the past year to a median rental price of $1,435 per month, the highest median rent Zillow has ever reported.
With the recent pick up in rent prices, rent growth is now rising at the same pace as incomes for the first time since June 2016, causing renters to put more of their income toward a monthly rental payment. Incomes rose 2.5 percentii since last November, and they have been hovering around that rate for over a year.
The West Coast dominates the list of markets with the fastest rising rents, with Sacramento, Calif., Riverside, Calif., and Seattle leading the way, all rising at over 5 percent annually. Portland rents are also appreciating quickly, up 4.6 percent since last November.
"After about a two-year slowdown, rent growth is starting to pick back up across the nation," said Zillow senior economist Aaron Terrazas. "The slowdown in rental appreciation, combined with consistent income growth, gave renters some reprieve from worsening rental affordability over the past few years. But as rental growth begins to catch up with income growth, affordability will deteriorate, placing a squeeze on budget-constrained renters. Looking into 2018, rent is expected to continue gaining steam in growing employment centers, like Dallas and New York, as well as a few smaller markets like Cleveland. More widespread rent growth could mean home buying demands stay high, as renters who can afford it move away from the unpredictability of rising rents toward the relative stability of a monthly mortgage payment instead."
National home values are continuing to rise, but not as quickly as they have over the past several months. Over the past year, home values rose 6.7 percent, the slowest rate of appreciation since November 2016, to a median home value of $205,100.
San Jose leads the nation in home value growth, up about 17.5 percent since last November to a median home value of $1,128,300. Las Vegas and Seattle follow with home values up 14 percent and 12 percent, respectively.
As 2017 comes to a close, home shoppers will find 10.5 percent fewer homes on the market to choose from than a year ago. San Jose, San Francisco, and Denver reported the greatest drop in inventory since last November. There are almost 55 percent fewer homes on the market in San Jose than last year. In San Francisco there are 30 percent fewer, and 26.5 percent fewer in Denver.
Mortgage rates moved in a very tight range throughout the month of November, reflecting stable financial markets and a predictable monetary policy outlook, despite looming leadership changes at the Federal Reserve.
Mortgages ratesiii on Zillow started and ended the month of November at 3.75 percent, which was also the month highiv, and hit a low of 3.68 percent in the first week of the monthv. Zillow's real-time mortgage rates are based on thousands of custom mortgage quotes submitted daily to anonymous borrowers on the Zillow Mortgages site and reflect the most recent changes in the market.
|
Metropolitan Area |
Zillow Home Value Indexvi (ZHVI) |
ZHVI Year-Over-Year Change |
ZHVI Forecast Over the Next Year |
Zillow Rent Indexvii (ZRI) |
ZRI Year-Over-Year Change |
ZRI Forecast Over the Next Year |
Year-Over-Year Inventory Change |
|
United States |
$ 205,100 |
6.7% |
3.2% |
$ 1,435 |
2.4% |
1.5% |
-10.5% |
|
New York, NY |
$ 429,400 |
7.4% |
2.7% |
$ 2,401 |
0.7% |
2.2% |
-15.7% |
|
Los Angeles-Long Beach-Anaheim, CA |
$ 625,600 |
6.3% |
2.3% |
$ 2,725 |
4.2% |
3.5% |
-22.8% |
|
Chicago, IL |
$ 213,800 |
5.2% |
2.3% |
$ 1,651 |
1.0% |
0.2% |
-10.4% |
|
Dallas-Fort Worth, TX |
$ 218,300 |
9.0% |
4.7% |
$ 1,600 |
2.9% |
2.7% |
22.2% |
|
Philadelphia, PA |
$ 220,700 |
3.4% |
2.4% |
$ 1,579 |
0.4% |
0.4% |
-11.9% |
|
Houston, TX |
$ 184,500 |
5.1% |
3.4% |
$ 1,538 |
-1.3% |
0.0% |
2.0% |
|
Washington, DC |
$ 385,500 |
2.1% |
1.3% |
$ 2,135 |
0.7% |
0.4% |
9.1% |
|
Miami-Fort Lauderdale, FL |
$ 262,400 |
7.5% |
1.6% |
$ 1,850 |
-1.2% |
2.4% |
-1.4% |
|
Atlanta, GA |
$ 184,600 |
7.4% |
4.3% |
$ 1,383 |
4.1% |
4.1% |
-13.6% |
|
Boston, MA |
$ 436,200 |
6.7% |
3.3% |
$ 2,369 |
2.0% |
1.3% |
-17.3% |
|
San Francisco, CA |
$ 893,100 |
8.1% |
3.8% |
$ 3,388 |
0.4% |
0.5% |
-30.1% |
|
Detroit, MI |
$ 143,300 |
6.9% |
3.4% |
$ 1,187 |
1.8% |
1.1% |
-13.4% |
|
Riverside, CA |
$ 339,100 |
6.8% |
5.0% |
$ 1,847 |
6.2% |
4.1% |
-19.1% |
|
Phoenix, AZ |
$ 244,800 |
7.0% |
3.0% |
$ 1,349 |
3.8% |
3.6% |
-12.9% |
|
Seattle, WA |
$ 463,800 |
12.3% |
5.4% |
$ 2,203 |
5.4% |
5.4% |
-20.8% |
|
Minneapolis-St Paul, MN |
$ 247,000 |
5.2% |
2.1% |
$ 1,628 |
5.0% |
2.6% |
-11.4% |
|
San Diego, CA |
$ 560,800 |
6.6% |
3.7% |
$ 2,541 |
4.4% |
2.9% |
-25.1% |
|
St. Louis, MO |
$ 150,300 |
1.6% |
3.0% |
$ 1,139 |
1.4% |
-0.2% |
-10.1% |
|
Tampa, FL |
$ 191,800 |
8.4% |
2.9% |
$ 1,360 |
1.7% |
0.2% |
-15.1% |
|
Baltimore, MD |
$ 261,400 |
2.3% |
1.2% |
$ 1,733 |
0.3% |
0.8% |
-6.1% |
|
Denver, CO |
$ 376,500 |
6.5% |
3.0% |
$ 2,038 |
1.8% |
3.3% |
-26.5% |
|
Pittsburgh, PA |
$ 138,900 |
5.2% |
3.0% |
$ 1,058 |
-2.0% |
-2.6% |
-11.3% |
|
Portland, OR |
$ 370,700 |
5.7% |
3.7% |
$ 1,879 |
4.6% |
4.7% |
3.0% |
|
Charlotte, NC |
$ 181,600 |
9.3% |
4.0% |
$ 1,288 |
3.6% |
2.9% |
-0.8% |
|
Sacramento, CA |
$ 380,000 |
8.7% |
5.4% |
$ 1,829 |
7.5% |
7.3% |
-22.1% |
|
San Antonio, TX |
$ 167,700 |
7.4% |
3.5% |
$ 1,339 |
1.1% |
0.4% |
6.8% |
|
Orlando, FL |
$ 212,100 |
7.5% |
3.8% |
n/a |
n/a |
n/a |
-13.8% |
|
Cincinnati, OH |
$ 156,500 |
6.2% |
3.0% |
$ 1,275 |
2.7% |
3.5% |
-12.2% |
|
Cleveland, OH |
$ 137,200 |
6.0% |
2.2% |
$ 1,142 |
-0.3% |
0.3% |
-12.9% |
|
Kansas City, MO |
$ 164,600 |
8.3% |
3.4% |
$ 1,272 |
2.4% |
2.1% |
5.8% |
|
Las Vegas, NV |
$ 243,400 |
13.8% |
7.1% |
$ 1,290 |
4.0% |
2.8% |
-24.6% |
|
Columbus, OH |
$ 169,300 |
6.7% |
3.5% |
$ 1,325 |
2.6% |
2.0% |
-22.7% |
|
Indianapolis, IN |
$ 141,700 |
6.1% |
3.7% |
$ 1,209 |
1.9% |
1.5% |
-22.1% |
|
San Jose, CA |
$ 1,128,300 |
17.4% |
8.9% |
$ 3,493 |
0.5% |
0.1% |
-54.0% |
|
Austin, TX |
$ 277,600 |
6.6% |
3.3% |
$ 1,689 |
-0.6% |
0.6% |
6.9% |
About Zillow
Zillow is the leading real estate and rental marketplace dedicated to empowering consumers with data, inspiration and knowledge around the place they call home, and connecting them with the best local professionals who can help. In addition, Zillow operates an industry-leading economics and analytics bureau led by Zillow's Chief Economist Dr. Svenja Gudell. Dr. Gudell and her team of economists and data analysts produce extensive housing data and research covering more than 450 markets at Zillow Real Estate Research. Zillow also sponsors the quarterly Zillow Home Price Expectations Survey, which asks more than 100 leading economists, real estate experts and investment and market strategists to predict the path of the Zillow Home Value Index over the next five years. Launched in 2006, Zillow is owned and operated by Zillow Group, Inc. (NASDAQ:Z and ZG), and headquartered in Seattle.
Zillow and Zestimates are registered trademarks of Zillow, Inc.
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i The Zillow Real Estate Market Reports are a monthly overview of the national and local real estate markets. The reports are compiled by Zillow Real Estate Research. For more information, visit www.zillow.com/research/. The data in Zillow's Real Estate Market Reports are aggregated from public sources by a number of data providers for 928 metropolitan and micropolitan areas dating back to 1996. Mortgage and home loan data are typically recorded in each county and publicly available through a county recorder's office. All current monthly data at the national, state, metro, city, ZIP code and neighborhood level can be accessed at www.zillow.com/local-info/ and www.zillow.com/research/data. | |||||||
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ii According to the Bureau of Labor Statistics, November 2017. | |||||||
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iii Mortgage rates for a 30-year fixed mortgage | |||||||
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iv Month high occurred on November 1st and 14th. | |||||||
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v Month low occurred on November 6th, 7th, and 8th. | |||||||
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vi The Zillow Home Value Index (ZHVI) is the median estimated home value for a given geographic area on a given day and includes the value of all single-family residences, condominiums and cooperatives, regardless of whether they sold within a given period. It is expressed in dollars, and seasonally adjusted. | |||||||
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vii The Zillow Rent Index (ZRI) is the median Rent Zestimate® (estimated monthly rental price) for a given geographic area on a given day, and includes the value of all single-family residences, condominiums, cooperatives and apartments in Zillow's database, regardless of whether they are currently listed for rent. It is expressed in dollars. | |||||||
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SOURCE Zillow
