SEATTLE, May 19, 2017 /PRNewswire/ -- As rent becomes
more expensive, renters are starting to look for cheaper housing
options outside downtown cores, prompting rent payments to rise
faster in the suburbs than in urban areas, according to a new
Zillow® report. For the first time in four years,
suburban rents are rising faster than urban rents.
An increase in multifamily construction has slowed rent growth
across the country, with rents rising at their slowest pace in five
years. The suburbs often offer larger apartments and more
single-family homes for rent with more space -- about 19 percent of
all single-family homes in the U.S. are rentals, up from 13 percent
in 2005.
In the U.S., the median monthly cost of a suburban rental is up
about 2.5 percent year-over-year, while the median cost of an urban
rental is up 2.3 percent. At this time last year, the median urban
rental price was up 5 percent year-over-year, while median suburban
rental prices were up 3 percent.
The trend is more pronounced in booming housing markets where
rent affordability is worsening. Rents in the Nashville, San
Francisco and Seattle metro
areas are growing faster in the suburbs than in urban areas as
rising costs force renters out of the city, increasing demand in
the suburbs. Over the past decade, the share of income needed for
the median rent payment in the San
Francisco metro has increased from 34 percent to 44 percent.
In the Seattle metro, the share
has increased from 26 percent to 32 percent.
Expensive coastal cities are coming off about a decade of
rapidly rising rents. Years of increases have pushed urban living
out of reach for many renters, who may be choosing a longer commute
in exchange for cheaper rental payments. Rent affordability is a
significant issue for renters across the country, and in many major
metros, the share of income needed to pay rent well surpasses 30
percent.
"Because walkable urban centers close to amenities are typically
a big draw for renters, you'd expect rents to rise faster in the
city than in the suburbs -- which is exactly what we've been seeing
until very recently," said Zillow Chief Economist Dr. Svenja Gudell. "But a handful of factors are
helping turn the tables and beginning to push suburban rents up at
a higher clip. These include deteriorating rental affordability in
expensive urban cores; new apartments, albeit high-end ones,
opening downtown compared to relatively few in outlying areas; and
preferences among some renters toward the space offered by
single-family homes in the suburbs. Rents themselves are still
lower in the suburbs, but if demand keeps growing for suburban
rentals and supply continues to lag, that will also start to
change. As more formerly urban renters move to the suburbs in
coming years, we'll likely start seeing more apartment buildings
and walkable amenities popping up in those communities."
The price of an urban rental in Nashville is up 1.7 percent since this time
last year, but the price of a rental in the suburbs is up almost 5
percent, with the median price of suburban rentals almost
$500 less than an urban rental,
despite many suburban rentals offering more space. Rents in
Seattle are growing strongly
across the metro, but the median price of suburban rentals is
growing faster than the price of urban rentals by about 2
percentage points.
In San Francisco, urban rents
are down 0.4 percent since this time last year, but rents in the
suburbs are up 2.6 percent. The median rent price of a suburban
rental is about $350 less than an
urban rental in San Francisco.
Metropolitan
Area
|
Suburban
Zillow
Rent Indexi (ZRI)
|
Suburban
ZRI YoY
Change
|
Urban
ZRI
|
Urban
ZRI YoY
Change
|
Metro Rental
Affordabilityii
|
Percent
Single-
Family
Homes as
Rentals
|
United
States
|
$
1,550
|
2.5%
|
$
1,830
|
2.3%
|
29.2%
|
16.8%
|
New York/ New
Jersey
|
$
2,535
|
3.3%
|
$
2,347
|
0.7%
|
40.5%
|
10.5%
|
Los Angeles-Long
Beach-Anaheim, CA
|
$
2,747
|
5.2%
|
$
2,662
|
4.9%
|
48.5%
|
24.5%
|
Chicago,
IL
|
$
1,682
|
0.1%
|
$
1,610
|
-1.4%
|
29.8%
|
12.8%
|
Dallas-Fort Worth,
TX
|
$
1,606
|
4.5%
|
$
2,174
|
3.3%
|
29.9%
|
17.0%
|
Philadelphia,
PA
|
$
1,745
|
1.0%
|
$
1,208
|
2.1%
|
28.0%
|
14.9%
|
Houston,
TX
|
$
1,558
|
-0.9%
|
$
1,591
|
-1.9%
|
29.9%
|
16.0%
|
Washington,
DC
|
$
2,127
|
0.1%
|
$
2,450
|
1.2%
|
26.5%
|
14.7%
|
Miami-Fort
Lauderdale, FL
|
$
1,931
|
4.2%
|
$
1,844
|
1.0%
|
n/a
|
20.8%
|
Atlanta,
GA
|
$
1,358
|
3.7%
|
$
1,861
|
7.1%
|
25.4%
|
19.3%
|
Boston, MA
|
$
2,370
|
4.4%
|
$
2,492
|
1.6%
|
34.3%
|
8.5%
|
San Francisco,
CA
|
$
3,231
|
2.6%
|
$
3,576
|
-0.4%
|
43.8%
|
20.4%
|
Detroit,
MI
|
$
1,302
|
2.6%
|
$
749
|
-0.3%
|
25.5%
|
16.1%
|
Riverside,
CA
|
$
1,822
|
3.2%
|
$
1,306
|
3.4%
|
36.2%
|
24.8%
|
Phoenix,
AZ
|
$
1,379
|
3.7%
|
$
1,221
|
3.6%
|
27.1%
|
22.1%
|
Seattle,
WA
|
$
2,105
|
8.2%
|
$
2,452
|
6.3%
|
32.0%
|
16.5%
|
Minneapolis-St Paul,
MN
|
$
1,626
|
3.2%
|
$
1,597
|
5.3%
|
26.0%
|
10.6%
|
San Diego,
CA
|
$
2,553
|
3.4%
|
$
2,352
|
4.1%
|
42.0%
|
25.2%
|
St. Louis,
MO
|
$
1,217
|
0.3%
|
$
971
|
3.1%
|
23.1%
|
14.1%
|
Tampa, FL
|
$
1,390
|
4.1%
|
$
1,281
|
4.4%
|
32.2%
|
19.2%
|
Baltimore,
MD
|
$
1,785
|
0.1%
|
$
1,253
|
-3.0%
|
28.0%
|
16.3%
|
Denver, CO
|
$
2,027
|
1.2%
|
$
1,993
|
2.1%
|
33.0%
|
15.9%
|
Pittsburgh,
PA
|
$
1,121
|
-2.6%
|
$
1,002
|
0.1%
|
23.0%
|
13.7%
|
Portland,
OR
|
$
1,854
|
6.5%
|
$
1,898
|
5.8%
|
32.6%
|
16.9%
|
Charlotte,
NC
|
$
1,340
|
3.5%
|
$
1,839
|
5.7%
|
26.7%
|
17.8%
|
Sacramento,
CA
|
$
1,729
|
4.9%
|
$
1,884
|
8.6%
|
31.3%
|
23.7%
|
San Antonio,
TX
|
$
1,351
|
1.8%
|
$
1,145
|
6.2%
|
28.4%
|
19.2%
|
Orlando,
FL
|
$
1,441
|
4.3%
|
$
1,130
|
4.5%
|
31.8%
|
20.4%
|
Cincinnati,
OH
|
$
1,306
|
2.5%
|
$
1,059
|
6.9%
|
25.4%
|
14.7%
|
Cleveland,
OH
|
$
1,232
|
1.4%
|
$
870
|
0.0%
|
25.9%
|
15.3%
|
Kansas City,
MO
|
$
1,354
|
2.0%
|
$
847
|
5.2%
|
23.7%
|
17.6%
|
Las Vegas,
NV
|
$
1,302
|
2.1%
|
$
1,110
|
2.4%
|
28.2%
|
28.5%
|
Columbus,
OH
|
$
1,360
|
2.7%
|
$
1,092
|
-2.3%
|
25.6%
|
18.1%
|
Indianapolis,
IN
|
$
1,210
|
0.0%
|
$
752
|
0.4%
|
25.3%
|
17.1%
|
San Jose,
CA
|
$
3,558
|
1.1%
|
$
3,412
|
0.0%
|
39.2%
|
20.2%
|
Austin, TX
|
$
1,727
|
0.4%
|
$
2,035
|
1.6%
|
29.8%
|
16.0%
|
Virginia Beach,
VA
|
$
1,443
|
-0.38%
|
$
1,242
|
-0.49%
|
27%
|
20.3%
|
Nashville,
TN
|
$
1,595
|
4.66%
|
$
2,067
|
1.67%
|
29%
|
14.5%
|
Providence,
RI
|
$
1,676
|
1.78%
|
$
1,479
|
1.36%
|
31%
|
10.5%
|
Milwaukee,
WI
|
$
1,585
|
1.47%
|
$
1,104
|
4.82%
|
27%
|
13.1%
|
Jacksonville,
FL
|
$
1,315
|
1.86%
|
$
967
|
1.38%
|
28%
|
19.1%
|
Memphis,
TN
|
$
1,082
|
1.30%
|
$
1,146
|
2.27%
|
25%
|
22.2%
|
Oklahoma City,
OK
|
$
1,123
|
-4.62%
|
$
1,133
|
-3.53%
|
25%
|
20.5%
|
Louisville-Jefferson
County, KY
|
$
1,195
|
2.89%
|
$
851
|
6.20%
|
25%
|
14.5%
|
Hartford,
CT
|
$
1,641
|
0.82%
|
$
1,370
|
8.68%
|
26%
|
7.8%
|
Richmond,
VA
|
$
1,353
|
0.11%
|
$
1,499
|
4.14%
|
26%
|
18.0%
|
New Orleans,
LA
|
$
1,383
|
-1.54%
|
$
1,446
|
-2.52%
|
34%
|
17.5%
|
Buffalo,
NY
|
$
1,298
|
-3.19%
|
$
982
|
7.38%
|
27%
|
9.8%
|
Raleigh,
NC
|
$
1,489
|
2.78%
|
$
1,317
|
5.65%
|
25%
|
16.5%
|
Birmingham,
AL
|
$
1,075
|
-1.49%
|
$
961
|
-0.56%
|
24%
|
13.2%
|
Salt Lake City,
UT
|
$
1,523
|
3.64%
|
$
1,509
|
6.28%
|
26%
|
12.5%
|
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 the best local professionals who can help. In
addition, Zillow operates an industry-leading economics and
analytics bureau led by Zillow'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 (NASDAQ:Z and ZG), and headquartered in Seattle.
Zillow is a registered trademark of Zillow, Inc.
______________________________
i The Zillow Rent Index (ZRI) is the median Rent
Zestimate® (estimated monthly rental price) for a given
geographic area on a given day, and includes the value of all
single-family residences, condominiums, cooperatives and apartments
in Zillow's database, regardless of whether they are currently
listed for rent. It is expressed in dollars. Data is from
March 2017.
ii Zillow determines rental affordability by analyzing
the current percentage of a metro area's median income needed to
afford the rent payment on a median-priced rental home or
apartment. Data is from 2016 Q4.
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/rents-are-rising-in-the-suburbs-300460501.html
SOURCE Zillow