Zillow's latest report reveals the rising cost of renting single-family homes compared to apartments in 2024. Factors like high mortgage rates and expensive down payments are pushing potential buyers towards renting, driving up demand for single-family rentals. The report also highlights the increasing income needed to afford rent.
Renting a home is proving more expensive than renting an apartment for consumers in the housing market, according to 2024 data released by Zillow. The online real estate marketplace unveiled a new market report revealing that rent for a single-family home now costs 20% more than typical apartment rents, meaning a renter would shell out approximately $350 more monthly to secure a single-family home.
This trend is partly attributed to potential buyers facing a challenging housing market characterized by high upfront costs and expensive mortgage rates, compelling them to opt for renting instead.Zillow reported that the average rent for single-family homes reached $2,174 in December 2024, representing a 4.4% increase from the previous year and a staggering 40.6% surge over the past five years. In contrast, the asking rent for multifamily homes stood at $1,812 in December, which is 2.4% higher compared to 2023 and 26.2% over the past five years.Furthermore, Zillow noted that single-family home rents have skyrocketed by 41% since the onset of the pandemic, compared to a 26% increase for multifamily rents. Notably, the income required to afford rent jumped by 3.4% year-over-year in December to $78,592. Zillow also pointed out that since before the pandemic, the income needed to rent a property has surged by a substantial 33.4%. To gauge rental affordability across the US, Zillow utilized its 'Zillow Observed Index for December 2024' report, comparing year-over-year growth and rental prices for both single-family homes and multifamily residences in 50 US cities. The report delved into rental affordability in these metropolitan areas and analyzed rent concessions. Rent concessions encompass temporary discounts or incentives landlords may offer to entice renters
RENTAL COSTS HOUSING MARKET SINGLE-FAMILY HOMES APARTMENTS MORTGAGE RATES AFFORDABILITY
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