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Rent Growth Hits 10-Month High as Home Value Appreciation Drops Sharply
Rent prices grew on an annual basis at their highest rate since April, after decreasing for the first time in six years last fall
- Rent prices grew 2.4 percent from a year ago. The median U.S. rent is now $1,472.
- The typical U.S. home is worth $226,300, a year-over-year increase of 7.2 percent. This is the smallest annual increase in home values since December 2017, down from 8 percent two months earlier.
- U.S. for-sale home inventory rose for the fifth time in the past six months.
- Expensive West Coast markets continued to cool, experiencing the most extreme slowdowns in home value appreciation and rises in inventory.
Mar 14, 2019
SEATTLE, March 14, 2019 /PRNewswire/ -- Rent prices grew at their fastest rate in 10 months in February, reaching 2.4 percent year-over-year appreciation, according to the February Zillow® Real Estate Market Report[i].
The U.S. median monthly rent was $1,472 in February, up from $1,438 a year earlier. This translates to more than $400 in additional yearly expenses for the typical renter. Rents have steadily recovered since a slowdown in the fall that saw the first annual price decreases in more than six years.
Annual rent growth accelerated from January rates in most large housing markets, with the biggest jumps coming in Portland -- a turnaround after six straight months of annual rent declines from July through December -- and Indianapolis.
The only two large housing markets where rent growth fell were Orlando and Pittsburgh. Despite that slowdown, both still saw higher-than-average growth, with Orlando rents growing faster than any other large metro area (7.0 percent).
New York renters have yet to see an effect from Amazon's decision to not build a new headquarters in Long Island City. Its rent prices, along with those in Washington, D.C., and Nashville, two markets where Amazon still intends to build large office spaces, have largely followed national trends since the November announcement.
"The rental market spent part of last year catching its breath after several years of breakneck growth," said Zillow economist Jeff Tucker. "Landlords are now coming to terms with the fact that rent cannot grow faster than income forever, and after that short correction we can expect a much more vanilla, slow-growth market going forward. As we enter the 2020s, the demand for rentals is projected to fall as many millennials move on to homeownership."
While rent price growth increased, national home value appreciation sagged to its lowest level since December 2017. The median U.S. home value is $226,300, a 7.2 percent increase from a year earlier. The cooldown was felt most in San Jose, Calif., and San Francisco, though these remain the two priciest large markets in the country.
U.S. for-sale home inventory grew 1 percent year-over-year, an increase of 16,137 homes. This is the fifth month out of the past six in which inventory has increased on an annual basis, after declining for 44 straight months. Inventory picked up the most in San Jose, Seattle and Los Angeles, further signaling a cooldown from the frenetic pace of the past year in major West Coast markets.
Mortgage rates listed on Zillow were mostly flat in February. Rates ended February at 4.16 percent, down one basis point from the start of the month. 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 | Zillow | ZHVI | Zillow | ZRI | Inventory |
United States | $226,300 | 7.2% | $1,472 | 2.4% | 1.0% |
New York, NY | $440,400 | 4.7% | $2,419 | 1.2% | 2.6% |
Los Angeles-Long Beach-Anaheim, CA | $652,200 | 2.5% | $2,835 | 3.5% | 26.4% |
Chicago, IL | $225,300 | 3.5% | $1,690 | 3.0% | 1.9% |
Dallas-Fort Worth, TX | $244,400 | 10.0% | $1,641 | 2.8% | 15.3% |
Philadelphia, PA | $233,500 | 3.5% | $1,605 | 2.3% | -6.7% |
Houston, TX | $206,300 | 6.3% | $1,583 | 2.2% | 9.2% |
Washington, DC | $406,800 | 2.9% | $2,172 | 1.7% | -24.7% |
Miami-Fort Lauderdale, FL | $284,700 | 6.7% | $1,918 | 2.8% | 7.0% |
Atlanta, GA | $218,600 | 11.1% | $1,443 | 3.8% | 13.9% |
Boston, MA | $468,100 | 5.3% | $2,391 | 2.0% | 15.4% |
San Francisco, CA | $955,200 | 3.5% | $3,448 | 1.6% | 24.2% |
Detroit, MI | $161,300 | 8.2% | $1,225 | 2.3% | 13.6% |
Riverside, CA | $368,300 | 5.2% | $1,983 | 6.2% | 11.5% |
Phoenix, AZ | $266,300 | 7.1% | $1,442 | 6.8% | 0.7% |
Seattle, WA | $491,500 | 3.0% | $2,232 | 2.0% | 31.8% |
Minneapolis-St Paul, MN | $269,200 | 6.0% | $1,697 | 4.2% | -3.2% |
San Diego, CA | $590,500 | 2.1% | $2,643 | 4.2% | 25.0% |
St. Louis, MO | $167,100 | 5.4% | $1,155 | 1.6% | -9.1% |
Tampa, FL | $213,800 | 7.8% | $1,439 | 5.5% | 8.5% |
Baltimore, MD | $268,500 | 3.2% | $1,751 | 1.0% | -14.9% |
Denver, CO | $407,500 | 4.5% | $2,104 | 3.3% | 18.8% |
Pittsburgh, PA | $144,400 | 5.2% | $1,100 | 4.9% | -10.0% |
Portland, OR | $397,500 | 3.8% | $1,867 | 0.9% | 13.2% |
Charlotte, NC | $207,600 | 9.8% | $1,339 | 3.6% | 0.9% |
Sacramento, CA | $409,600 | 3.7% | $1,910 | 3.7% | 10.3% |
San Antonio, TX | $193,900 | 6.7% | $1,364 | 1.9% | 12.0% |
Orlando, FL | $238,300 | 8.8% | $1,527 | 7.0% | 6.5% |
Cincinnati, OH | $169,900 | 8.6% | $1,304 | 2.4% | 3.0% |
Cleveland, OH | $146,300 | 6.2% | $1,162 | 1.7% | N/A |
Kansas City, MO | $192,800 | 9.4% | $1,293 | 1.7% | -13.7% |
Las Vegas, NV | $279,600 | 10.5% | N/A | N/A | 3.0% |
Columbus, OH | $190,900 | 7.2% | $1,360 | 3.7% | 7.3% |
Indianapolis, IN | $165,600 | 12.8% | $1,234 | 2.7% | N/A |
San Jose, CA | $1,230,400 | 3.3% | $3,547 | 1.4% | 42.9% |
Austin, TX | $310,200 | 6.6% | $1,700 | 1.6% | 1.5% |
Zillow
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, data analysts, applied scientists and engineers 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/research/data.
SOURCE Zillow
For further information: Alex Lacter, Zillow, press@zillow.com