Monthly rent for two and three-bedroom homes are appreciating 2.8 percent annually, which is faster than one-bedroom homes and the nation as a whole, according to the latest HotPads Rent Report
SAN FRANCISCO, June 29, 2018 – Renters searching for a new home this summer can expect higher prices than last year, particularly among two and three-bedroom rentals, according to the latest quarterly HotPads® Rent Report¹. Rent among two and three-bedroom homes is appreciating slightly faster than one-bedroom homes in U.S. metros with more new apartment construction.
Rent prices rose 2.8 percent over the past year among both two-bedroom and three-bedroom rentals. Renters can expect to pay $1,310 per month for a two-bedroom unit and $1,445 per month for a three-bedroom unit.
Finding an affordable rental may be a bit easier for those searching for a one-bedroom rental this year. Renters can expect to spend about $1,275 per month for a one-bedroom unit, up 2.2 percent over the past year.
Overall, median rent in the U.S. is $1,480, up 2.5 percent from a year ago. As rent continues to rise, it’s becoming more difficult for renters to keep up with costs. With rent among two and three-bedroom rentals rising the fastest, renters who need more space face an even tighter affordability crunch.
“Rent growth has mellowed out to a steady rate recently, but overall prices are still high compared to recent years,” said Joshua Clark, economist at HotPads. “Two and three-bedroom rentals are seeing the fastest pace of price growth this year, usurping one-bedrooms as the fastest-appreciating segment of the rental market in April 2018. New apartment construction tends to focus on studios and one-bedrooms, so the additional supply of smaller units has eased price pressures in that market segment. Renters looking for a larger apartment or home – including young families – should expect faster rent growth this year.”
In Baltimore, Washington, D.C., and Austin – all markets that have seen substantial new apartment construction in recent years – median rent for a two or three-bedroom home is appreciating about twice as fast as a one-bedroom home. Median rent for two and three-bedroom homes in Chicago and San Antonio are also appreciating quickly, more than 80 percent faster than one-bedroom rents.
Though two and three-bedroom rents are appreciating quickly, the financial incentives for living with a roommate remain strong. Sharing a two-bedroom rental with one person is still about half the cost of renting a solo one-bedroom unit.
HotPads is a Zillow® Group-owned apartment and home search platform for renters in urban areas across the United States. For more information on the U.S. rental market, visit HotPads.com.
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Launched in 2005, HotPads is based in San Francisco and is owned and operated by Zillow Group, Inc. (NASDAQ: Z and ZG).
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¹ The HotPads Rent Report is a quarterly overview of the median rent for houses, condos, apartments and other home types in the United States and the top 35 most populous metro areas. Data are aggregated from rental listings on HotPads dating back to January 2011. The reports are compiled by the HotPads Economic Research team. HotPads tracks data for rental and housing markets throughout the United States, with select data available on the city and neighborhood level within the top 35 metros.