Rental Market Experiences Significant Increases in Prices, Listings

HouseCanary, Inc. released its latest National Rental Report, showing that overall listing inventory is up 70% year-over-year and days on market are up 50% year-over-year. New data revealed that median monthly rent prices may have seemingly reached a new peak.

Despite median listing prices for Single-Family Rentals (SFR) in other parts of the U.S. slowing down, Metropolitan Statistical Areas (MSA) in the East Coast and Industrial Midwest continue to be hotspots for real estate investment opportunities due to dramatic price increases since Q2 2022.

HouseCanary data also finds that Naples-Immokalee-Marco, FL—which previously held the title for the most expensive median monthly rent prices in the U.S—has now been surpassed by Los Angeles-Long Beach-Anaheim, California, and San Diego-Carlsbad, California.

For the first time since Q3 2022, Naples, Florida, has been supplanted as the most expensive rental market in the country, with the Los Angeles/Long Beach area and San Diego taking the top two spots. Like in previous quarters, prices remain high in large California metros, Florida, and New England.

After falling out of the top ten for median monthly rental price in Q1, Seattle, Washington, returns to the list. New data revealed coastal areas continue to maintain high rent prices.

“In Q2, we’ve seen the rental market continue to increase in median listings, prices and days on market," said Chris Stroud, Co-founder and Chief of Research at HouseCanary. "While SFR prices only experienced slight year-over-year increases, the surge in available-for-rent inventory suggests that rental prices have reached their peak and are anticipated to trend downwards in the coming months. As interest rate hikes slow down and inventory remains elevated, single-family rentals remain an attractive option for potential home buyers, providing stability to the rental market.”

Key findings about the rental market for single-family detached listings in Q2 of 2023:

• Rent prices remain historically high despite a very slight increase in year-over-year price growth. With about 70% year-over-year increases in the weekly average of listings in the second quarter of 2023, prices of single-family rentals have only seen a slight year-over-year increase of about 0.2%.
• Southern states have experienced the most upward growth in the number of listings available for rent in the market. Most notably, MSAs located in Florida, Louisiana, and North Carolina experienced the largest growths in inventory year-over-year and made up 80% of the top 10 MSAs with the largest increases.
• Two California MSAs now top the list for the nation’s highest median rent prices of Q2 2023. MSAs in California and Florida boasted some of the most expensive single-family median monthly rental prices. MSAs in these two states comprised 70% of the 10 highest average monthly rents across the country, with Los Angeles-Long Beach-Anaheim, California and San Diego-Carlsbad, California taking the top spots with a median price of $4,984 and $4,862 per month, respectively.
• By the end of Q2 2023, rental properties stayed on the market for an average of 25.8 days, roughly a 43.97% increase since the same period in 2022. Most notably, six of the top 10 MSAs showing the largest annual increases in days on market year-over-year are located in the South of the United States. Of which, Raleigh, North Carolina boasted a 165% increase since Q2 2022 and claimed the top spot on the list.
• Rent prices have likely peaked and are expected to remain high as potential home buyers are still hesitant to enter the purchase market. High prices and interest rates have provided somewhat of a floor to any possible large decreases in rental prices in the near future.

Among the least expensive median rental prices for Q2 2023, states in the southern U.S. take up nine of the ten spots on the list, with Cleveland, Ohio, being the only exception, following similar trends observed in Q1.

Southeastern states also made up 5 of the 10 MSAs with the lowest median rental prices. With little room for additional price growth due to elevated inventory and relatively high prices across rental markets, experts predict these areas will likely maintain low median rental prices.

To read the full report, including more data, charts, and methodology, click here.