Rising home prices and low inventory isn’t just a narrative for homebuyers. As rental houses have been in high demand, a lack of supply is boosting rental home prices.
According to Zillow, the housing crisis caused the demand for single-family rental homes to increase as families struggled to be able to afford to buy homes. The report noted that almost half of all renters consider renting a single-family home, but with the current housing trends, they are unable to do so.
"When the market crashed, many families lost homes they owned during the foreclosure crisis, and now may not be able to afford to buy another as home prices rise," said Dr. Svenja Gudell Chief Economist at Zillow.
Zillow’s data reports that the median rent for houses rose 1.3 percent annually to a monthly rent payment of $1,404. In addition, there are fewer single-family homes to rent than a decade ago. According to the report, “almost 20 percent of all single-family homes across the U.S. were rented in 2016, up from 13.5 percent 10 years prior.”
In addition, Zillow’s data reveals that a 20 percent down payment on a typical U.S. home costs more than two-thirds of the median household income.
"Those who want to buy are finding it difficult to find the right one, or may need a bit more time to come up with a down payment, but still want the advantage of space that single-family residences often provide,” said Gudell.
This, coupled with the foreclosure crisis turning millions of homeowners into renters, is a big reason why demand for single-family rental homes has risen over the last few years, according to Gudell.
Zillow noted that the full data for this report titled 2017 Zillow Group Consumer Housing Trends Report (ZGR) is set to release this fall.