RentRange released an analysis of the top U.S. Metropolitan Statistical Areas (MSAs) with the highest increases in average rental rate for single-family homes in Q3 from the year prior. The report found that there was a notable shift from the past several quarters’ trend of metros located in the Sun Belt to metros found in the Rust Belt.
“The emergence of rental rate increases in several Rust Belt markets is creating a unique opportunity for single-family rental market investors to pursue both property value increases and high yields,” say Wally Charnoff, CEO, RentRange Data Services. “For years, the Rust Belt has produced strong yields, but tepid property price appreciation has kept rents relatively flat, forcing investors to choose between property appreciation or yield.”
With the report noting that rental rate increases among the Rust Belt emerged in Q3, RentRange is also quick to acknowledge that Florida and California saw their list representation reduced by half compared to the year prior after long dominating the ranking of highest increases.
RentRange reports that Florida has finally experienced a stabilization of rent increases nearly a decade after the housing crisis. In contrast to the market changes witnessed in Q3, the report says the notable single-family rental rate growth in already expensive areas with robust, expanding economies and tight inventory, is one trend that has not changed.
“Strengthening economies in those markets combined with below average inventory and home buying challenges, such as home buyers struggling to obtain mortgages, are creating the perfect environment for rental investors,” adds Charnoff. “At the same time, markets like Seattle and San Francisco offer less yield than these markets since prices are already very elevated.”
Top 10 Markets with the Highest Increase in Rental Rate
- Seattle-Tacoma-Bellevue WA
- Deltona-Daytona Beach-Ormond Beach FL
- Lake Havasu City-Kingman AZ
- San Francisco-Oakland-Hayward CA
- Charleston-North Charleston SC
- Charlotte-Concord-Gastonia NC-SC
- Myrtle Beach-Conway-North Myrtle Beach SC-NC
- Austin-Round Rock TX
- Cape Coral-Fort Myers FL
- Hickory-Lenoir-Morganton NC