Rent Appreciating at a Faster Rate this Spring than Last in Over 3/4 of Nation's Largest Markets

Pittsburgh, Detroit and Houston reported the greatest jumps in annual rent growth compared to last year, according to the May Zillow Real Estate Market Report

- Rent is appreciating at a faster rate this spring than last in 27 of the 35 largest U.S. rental markets. Pittsburgh, Detroit and Houston lead this trend.

- Rent is appreciating more slowly now than a year ago in some of the nation's priciest rental markets.

- The median U.S. home value rose 8 percent over the past year to $216,000. Home values in San Jose, Calif., Las Vegas and Seattle are rising the fastest.

- There are 5.3 percent fewer homes on the market now than a year ago.

News provided by

Zillow

Jun 28, 2018, 08:00 ET

SEATTLE, June 28, 2018 /PRNewswire/ -- Median rent is appreciating more quickly this spring than last in 27 of the 35 largest U.S markets, according to the May Zillow® Real Estate Market Reportⁱ.

Pittsburgh, Detroit and Houston reported the greatest jumps in annual rent growth this spring compared to last. Median rent in all three of these metros was falling at this time last year, but is now appreciating over 1 percent annually.

In some of the nation's most expensive rental markets, median rent is appreciating more slowly now than last spring. In Seattle, for example, where annual rent growth has been among the highest in the country, rent appreciation has slowed from a 5.8 percent annual growth rate last spring, to a 3.3 percent annual growth rate now. A similar trend holds true in Los Angeles, Portland and Boston.

Across the U.S., rent growth has been holding steady at about a 2-3 percent annual appreciation rate for the past 11 months. Median rent rose 2.1 percent over the past year to $1,440 per month.

Saving enough money for a down payment is one of the greatest hurdles to homeownership, and rising rents is one of the main reasons why saving is so difficult. Even in markets where rent growth is slowing, high prices have already been established. With mortgage rates rising and mortgage affordability deteriorating, owning a home may start to feel out of reach for many Americans.

"Over the past two years, rent growth slowed across the country as new apartments hit the market and renters with the financial means to do so increasingly became homeowners," said Zillow Senior Economist Aaron Terrazas. "The slowdown in rent growth was most prominent in the markets that moved most quickly to add units – either because it was easy to build or because of local demands. But the ever-swinging pendulum is again on the move. This spring rent appreciation has perked back up nationwide, though it remains well within a long-term sustainable range. The ebb-and-flow of supply and demand is following slightly different timeliness in different markets, but over the past two years, we have seen similar trends in markets from the Southeast to the Northwest."

Home values continue to appreciate across the country. The median U.S. home value rose just over 8 percent over the past year to $216,000. San Jose, Calif., Las Vegas and Seattle reported the greatest annual home value appreciation among the 35 largest U.S. metros.

The median home value in San Jose is now $1,265,300, up almost 26 percent since last May. Home values rose 15.5 percent over the past year in Las Vegas and 12 percent over the past year in Seattle.

Spring home shoppers will have 5.3 percent fewer homes to choose from than last year, though the pace of inventory declines has been slowing for the past 10 months. Markets with the greatest drop in for-sale inventory are Denver, Atlanta and Pittsburgh. Home shoppers in Denver and Atlanta will have 15 percent fewer homes to choose from than a year ago, and 13 percent fewer in Pittsburgh.

May ended with mortgage rates on Zillowⁱⁱ at 4.29 percent, after starting the month at 4.38 percent. May mortgage rates peaked in the middle of the monthⁱⁱⁱ at 4.51 percent, the highest rate since the beginning of 2013^iv, and hit a month low in the last few days of the month^v when rates were at 4.28 percent. 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	YoY Rent Growth in May 2017	YoY Rent Growth in May 2018	Zillow Rent Index (ZRI)	Zillow Home Value Index (ZHVI)	YoY ZHVI Change	YoY Inventory Change
United States	0.70%	2.10%	$ 1,440	$ 216,000	8.1%	-5.3%
New York, NY	-1.90%	0.90%	$ 2,378	$ 428,200	7.2%	-2.3%
Los Angeles-Long Beach-Anaheim, CA	4.20%	3.50%	$ 2,751	$ 644,900	8.0%	1.4%
Chicago, IL	-1.00%	0.90%	$ 1,638	$ 219,700	5.8%	-3.8%
Dallas-Fort Worth, TX	2.90%	1.20%	$ 1,595	$ 227,500	11.5%	32.6%
Philadelphia, PA	-1.00%	1.00%	$ 1,568	$ 227,300	6.2%	-5.0%
Houston, TX	-2.70%	1.20%	$ 1,550	$ 197,400	5.4%	-2.6%
Washington, DC	-0.10%	1.20%	$ 2,131	$ 400,000	4.5%	25.6%
Miami-Fort Lauderdale, FL	-1.80%	1.00%	$ 1,863	$ 271,900	8.0%	1.4%
Atlanta, GA	2.90%	4.00%	$ 1,393	$ 203,200	11.4%	-15.1%
Boston, MA	3.20%	1.20%	$ 2,359	$ 453,200	7.0%	-6.3%
San Francisco, CA	-0.40%	1.80%	$ 3,398	$ 949,800	11.2%	-4.4%
Detroit, MI	-1.30%	3.60%	$ 1,195	$ 154,100	9.9%	-1.5%
Riverside, CA	3.00%	6.50%	$ 1,895	$ 357,200	8.8%	3.2%
Phoenix, AZ	1.90%	4.00%	$ 1,366	$ 253,300	7.9%	-11.3%
Seattle, WA	5.80%	3.30%	$ 2,179	$ 490,200	12.2%	-6.9%
Minneapolis-St Paul, MN	3.10%	3.50%	$ 1,636	$ 260,700	7.9%	-7.3%
San Diego, CA	2.70%	3.00%	$ 2,542	$ 584,100	7.3%	19.8%
St. Louis, MO	0.10%	0.40%	$ 1,139	$ 160,400	5.1%	-5.8%
Tampa, FL	2.10%	2.70%	$ 1,386	$ 203,700	11.5%	-1.4%
Baltimore, MD	-0.80%	1.50%	$ 1,739	$ 264,600	4.9%	8.9%
Denver, CO	0.10%	2.80%	$ 2,051	$ 398,000	7.9%	-15.4%
Pittsburgh, PA	-5.20%	1.90%	$ 1,079	$ 140,600	7.7%	-13.0%
Portland, OR	3.60%	1.50%	$ 1,835	$ 389,800	5.8%	17.6%
Charlotte, NC	1.00%	3.40%	$ 1,293	$ 194,400	11.0%	8.3%
Sacramento, CA	4.50%	6.40%	$ 1,843	$ 399,100	7.0%	-5.9%
San Antonio, TX	1.00%	0.90%	$ 1,335	$ 184,200	5.9%	11.1%
Orlando, FL	2.70%	3.60%	$ 1,445	$ 225,000	9.6%	-10.5%
Cincinnati, OH	1.10%	2.00%	$ 1,276	$ 159,600	6.2%	-7.2%
Cleveland, OH	0.80%	0.10%	$ 1,140	$ 140,500	7.2%	-10.0%
Kansas City, MO	1.80%	0.60%	$ 1,266	$ 179,700	8.8%	-5.4%
Las Vegas, NV	0.80%	4.40%	$ 1,302	$ 261,900	15.5%	n/a
Columbus, OH	0.80%	2.90%	$ 1,333	$ 181,600	9.4%	-10.8%
Indianapolis, IN	-0.40%	0.90%	$ 1,197	$ 150,800	7.3%	n/a
San Jose, CA	-1.20%	1.80%	$ 3,500	$ 1,265,300	25.7%	-6.3%
Austin, TX	-1.00%	-0.50%	$ 1,680	$ 295,100	5.5%	-0.3%

Zillow Research

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 great real estate professionals. In addition, Zillow operates an industry-leading economics and analytics bureau led by Zillow Group'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.

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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.
ⁱⁱ Mortgage rates for a 30-year fixed mortgage.
ⁱⁱⁱ Month high hit on May 17^th.
^iv January 5, 2013
^v Month low was hit on May 29^th and 30^th.