For years, Southern California apartment rents have been soaring.
Now, a new report shows that rents have been rising even faster for houses, which are preferred by families and others seeking a bit more living space.
House rents averaged $3,114 a month in Orange County during the fourth quarter of 2016, according to Irvine-based HomeUnion, a firm that helps investors buy and rent out houses in about a dozen markets across the nation.
That’s up 22 percent, or $561 a month, over the past four years, vs. a 13 percent increase for apartment rents during the same period, figures from Reis Inc. show.
Los Angeles County’s average rent of $2,548 a month last quarter was up 22.1 percent over the past four years, compared with a 21.7 percent gain in apartment rents over the same period. In the Inland Empire, house rents increased 23 percent to $1,729 a month, vs. a 17 percent increase for apartments in the same four-year period.
Low vacancy was a key reason, spurred by a building slowdown during the recession followed by a hiring boom during the recovery, said Steve Hovland, HomeUnion’s director of research and communications.
During the fourth quarter, vacancy rates for investor-owned rental houses ranged from 3 percent in Orange County to 3.1 percent in Los Angeles County and 5.8 percent in the Inland Empire.
That’s comparable to apartment vacancies. But historically, rental house vacancies tend to be higher, Hovland said.
“What this shows is the single-family rental market is even tighter than the apartment market,” Hovland said. “ … You have to pay more rent (for a house), and they’re hard to find, even when you pay more rent.”
By comparison, the national average rent for a house was $1,817 a month in the last quarter of 2016, up 17 percent over the past four years, HomeUnion reported. The national vacancy rate was 6.7 percent.
Another reason the market is so tight: There are more renters in the region and fewer homeowners.
Southern California had almost 280,000 more rental households in 2015 than in 2009, a 12 percent jump, U.S. Census figures show. But the number of homeowners fell by almost 80,000, or 3 percent.
And because there’s twice as many apartments under construction than houses, single-family rentals are getting scarcer.
“There’s pent-up household demand out there,” Hovland said. “(Families are) going to have to be patient. … They’re going to have to go further out or get apartments.”
Rental houses vs. apartments
|Area||House rent/mo.||Apt. rent/mo.||House 4-yr ch||Apt. 4-yr ch||House vacancies||Apt. vacancies|
Sources: HomeUnion, Reis Inc.