Rents Appreciate at Faster Rate in 3/4 of Nation’s Largest Markets

Zillow, Seattle, said rents appreciated at a faster rate this past spring from a year ago in 27 of the 35 largest U.S. rental markets, but noted in pricier markets, rent appreciation slowed noticeably.

The company’s monthly Real Estate Market Report said Pittsburgh, Detroit and Houston reported the greatest jumps in annual rent growth compared to last year.

In Seattle, however, where annual rent growth has been among the highest in the country, rent appreciation has slowed from a 5.8 percent annual growth rate last spring, to a 3.3 percent annual growth rate now. A similar trend holds true in other high-rent cities such as Los Angeles, Portland and Boston.

Zillow said across the U.S., rent growth has held steady at a 2-3 percent annual appreciation rate for the past 11 months. Median rents rose y b2.1 percent over the past year to $1,440 per month.

“Over the past two years, rent growth slowed across the country as new apartments hit the market and renters with the financial means to do so increasingly became homeowners,” said Zillow Senior Economist Aaron Terrazas. “The slowdown in rent growth was most prominent in the markets that moved most quickly to add units–either because it was easy to build or because of local demands.”

But Terrazas noted the “ever-swinging pendulum” is again on the move. “This spring rent appreciation has perked back up nationwide, though it remains well within a long-term sustainable range,” he said. “The ebb-and-flow of supply and demand is following slightly different timeliness in different markets, but over the past two years, we have seen similar trends in markets from the Southeast to the Northwest.”