While a spike in apartment construction has helped stabilise multi-family rental prices, the same cannot be said for single-family homes, where supply remains tight. This imbalance has kept rents for detached houses higher, according to analysts.
According to Zillow, median rent prices for single-family homes have risen by approximately 41% since the onset of the pandemic. In contrast, multi-family rents have increased by 26% over the same period. The lack of new single-family rental construction has contributed to the price gap, with high demand keeping rents elevated.
“Single-family rentals are detached homes, perhaps with a yard,” Jessica Lautz, deputy chief economist at the National Association of Realtors told CNBC.
Data from Zillow shows that the typical asking rent for a single-family home in January 2025 was $2,179 (AUD $3,336), reflecting a 0.3% increase from the previous month and a 4.4% rise year-on-year. Meanwhile, multi-family units had an average asking rent of $1,820 (AUD $2,787), up 0.2% month-on-month and 2.7% from a year ago.
The difference in cost between these two property types is now the largest since Zillow began tracking the data in 2015.
High mortgage rates keep renters in the market
Would-be homebuyers are also staying in rentals longer due to high mortgage rates. Many potential buyers are unable to afford a home, pushing them to continue renting larger properties to accommodate changing life circumstances, such as marriage or having children.
The median age of renters in the US is now 42, with millennials (those aged 30 to 44) comprising about 31% of all renters, according to a separate 2024 Zillow report.
Meanwhile, the typical first-time homebuyer is now 38 years old, a record high, according to the National Association of Realtors.
The challenge of homeownership affordability has made single-family rentals attractive to many renters who want the experience of living in a house without the financial burden of buying. However, accessing these properties remains difficult due to cost constraints and tight supply.
