SEATTLE, WA — Single-family rental homes have emerged as the standout trend in the U.S. housing market, with rents now 20% higher than multifamily apartments, according to a new report from Zillow®. This marks the largest disparity on record, driven by strong demand for larger living spaces and limited new construction for detached homes.
While apartment rents have remained relatively stable due to a surge in multifamily construction, rents for single-family homes continue to rise, increasing by 4.4% year over year. Detached rental homes have seen a staggering 41% price increase since before the pandemic, compared to a 26% rise for multifamily units.
“Right now, more multifamily units are hitting the market than at any time in the past 50 years, but detached homes aren’t seeing the same surge in construction,” said Skylar Olsen, Zillow’s chief economist. She pointed to high mortgage rates and steep down payments as reasons millennials are renting single-family homes instead of buying them.
The trend is especially pronounced in cities like Salt Lake City, where single-family rentals command a 59% price premium over apartments — the highest among large U.S. metros. Conversely, Detroit has the smallest gap at 9%.
Apartment rents, meanwhile, have grown by 2.4% annually, below the pre-pandemic rate of 3%. Yet landlords are increasingly offering concessions like free rent or parking to attract tenants, with incentives now featured in 41% of nationwide rental listings.
For prospective buyers, the inventory of homes on the market has been recovering, reaching its highest December level since 2019. Though inventories remain 25% below pre-pandemic averages, more sellers are entering the market, particularly in the South and Texas, where builders have kept pace with demand.
With mortgage rates unlikely to drop significantly in the near future, renters and buyers alike will face ongoing challenges in navigating this evolving housing landscape.
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