The Growing Gap: Single-Family Rentals Outpace Apartments by 20%

Single-Family Rentals (SFR) vs. Apartments: A Growing Gap

A new study from Zillow reveals that single-family rental (SFR) homes are outpacing apartments in rental pricing by 20%. The rental market report for December 2024 highlights a widening gap between these two sectors, which continues to grow.

Key Findings from Zillow’s Analysis of the 50 Largest U.S. Metro Areas:

• In December 2024, the average asking rent for a single-family home was $2,174 per month, marking a 4.4% increase over the past year and a staggering 40.6% rise since the start of the COVID-19 pandemic.

• Apartment rents averaged $1,812 per month, up 2.4% year over year and 26.2% higher than pre-pandemic levels.

• Rental concessions were offered on 40% of listings on Zillow.

• For-sale inventory is recovering but remains 25% below pre-pandemic levels.

Regional Highlights:

• Salt Lake City had the largest gap, with single-family rentals 59% more expensive than apartments. Detroit showed the smallest difference at 9%, while Pittsburgh had a modest 14% gap due to a recent single-family construction boom.

• Rents fell monthly in 32 metro areas, including Denver (-1.3%), Salt Lake City (-0.6%), San Jose (-0.6%), Portland, Oregon (-0.6%), and Austin (-0.5%). Denver joined Austin and San Antonio as the only metro areas where rents declined year-over-year since 2023.

• Annual rent increases were highest in Hartford, Connecticut (7.9%), Cleveland (7%), Richmond, Virginia (6.5%), Providence, Rhode Island (6.2%), and Chicago (5.8%).

The main driver behind this increasing rental gap is the imbalance between supply and demand, which continues to shape the rental market landscape.