Data from 341 counties with a population of at least 100,000 shows rents rose more than home prices in 63% of them
For the second year in a row, the average annual gross yield on three-bedroom homes in the U.S. is expected to rise – this time to 7.55%, up from 7.39% in 2023. Limited inventory and higher home prices that have pushed affordability out of reach for most workers are the cause, according to ATTOM’s Q1 2024 Single-Family Rental Market report.
The report is intended to rank the best U.S. markets for buying single-family rental properties in 2024. It analyzed data from 341 counties with a population of at least 100,000 and found that rents rose more than home prices in 63% of them. The most notable examples were in the South.
The highest potential yields by county were in Indian River County, FL, St. Louis, MO, Cameron County, TX, Monroe County, NY, and Richmond County Ga. For counties with populations of more than one million, the highest potential yields were expected in Wayne County, MI, Allegheny County, PA, Cuyahoga County, OH, Cook County, IL, and Riverside County, CA, all with yields ranging from 9.7% to 12%.
The highest potential increases in rents in counties with populations over one million were expected in Riverside County, Los Angeles County, Fulton County, GA, Montgomery County, MD, and Dallas County, TX.
Flowing against the stream, decreased rents of less than 1% were anticipated in Kings County, NY, Cook County, Wayne County, IL, Miami-Dade County, and Nassau County, NY. The lowest potential returns were projected for Santa Clara County, CA, San Mateo County, CA, Arlington County, VA, Williamson County, TN and San Francisco County.
There is plenty of news to worry renters in the report. Median three-bedroom rents are rising faster than average wages in 197 (58%) of the 341 counties studied. Rents are rising faster than home prices in two-thirds of the nation (144 counties). Median home prices are rising faster than rents in 216 counties (63%) and faster than wages in 145 counties (43%).
On the other hand, average wages are going up faster than home prices in 57% of counties. And in 28 “growth counties”, average wages rose in the past year, while potential rents exceeded 10%.
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