Rents for single-family residential homes rose just 1.4% in August compared with the year before, according to analytics and data firm Cotality, down from a 2.3% annual gain in July. That’s also much less than the 3% average gain seen last year and is the smallest increase in 15 years.
Rent growth weakened across all price points, continuing a trend that has persisted in the second half of this year. Rents had been strengthening in the first half of this year.
There were, however, strong variations regionally. Chicago saw the highest annual rent growth at 4.7% in August, followed by Los Angeles at 2.8%, Philadelphia at 2.7% and Washington, D.C., at 2.6%.
Dallas saw a 0.6% decline in rent growth, the lowest in the nation. Dallas recently had a surge of new multifamily apartments come onto the market, which is keeping supply higher than demand, Cotality said.
“Atlanta, Philadelphia and Los Angeles continue to show stronger rent growth, with Los Angeles now only slightly above its pre-wildfire level from January,” said Molly Boesel, senior principal economist at Cotality. “Los Angeles ranks second among the top 10 metros for rent growth, suggesting that local conditions such as recovery efforts, limited housing supply, and regional economic factors can still influence rental trends even as national price growth moderates.”
