For first time in four years rents rising in U.S. suburbsStaff Writer | May 22, 2017
As rent becomes more expensive, renters are starting to look for cheaper housing options outside downtown cores, prompting rent payments to rise faster in the suburbs than in urban areas, according to a new Zillow report.
Houses An increase in multifamily construction
An increase in multifamily construction has slowed rent growth across the country, with rents rising at their slowest pace in five years.
The suburbs often offer larger apartments and more single-family homes for rent with more space - about 19 percent of all single-family homes in the U.S. are rentals, up from 13 percent in 2005.
In the U.S., the median monthly cost of a suburban rental is up about 2.5 percent year-over-year, while the median cost of an urban rental is up 2.3 percent.
At this time last year, the median urban rental price was up 5 percent year-over-year, while median suburban rental prices were up 3 percent.
The trend is more pronounced in booming housing markets where rent affordability is worsening.
Rents in the Nashville, San Francisco and Seattle metro areas are growing faster in the suburbs than in urban areas as rising costs force renters out of the city, increasing demand in the suburbs.
Over the past decade, the share of income needed for the median rent payment in the San Francisco metro has increased from 34 percent to 44 percent.
In the Seattle metro, the share has increased from 26 percent to 32 percent.
Expensive coastal cities are coming off about a decade of rapidly rising rents. Years of increases have pushed urban living out of reach for many renters, who may be choosing a longer commute in exchange for cheaper rental payments.
Rent affordability is a significant issue for renters across the country, and in many major metros, the share of income needed to pay rent well surpasses 30 percent.
The price of an urban rental in Nashville is up 1.7 percent since this time last year, but the price of a rental in the suburbs is up almost 5 percent, with the median price of suburban rentals almost $500 less than an urban rental, despite many suburban rentals offering more space.
Rents in Seattle are growing strongly across the metro, but the median price of suburban rentals is growing faster than the price of urban rentals by about 2 percentage points.
In San Francisco, urban rents are down 0.4 percent since this time last year, but rents in the suburbs are up 2.6 percent.
The median rent price of a suburban rental is about $350 less than an urban rental in San Francisco. ■