Residential rents in the United States grew for the ninth month in a row in June and are now up 3% year on year, taking the median monthly rent to $1,483.
Meanwhile, home values increased by 5.2% on an annual basis, down from 7.6% at the same time in 2018, according to the Zillow real estate market report.
But there is considerable regional variation. Rents in Las Vegas were up 10%, in Phoenix they increased by 8.4% and in Orlando by 7.4%, the data also shows.
Overall rents increased year on year in 49 of the nation’s top 50 markets with Milwaukee as the only exception. Nationally, rent growth has not been this strong since 2016 when pressure in the rental market spurred record numbers of multi-family permits.
The typical home is now worth $227,700, up slightly from May after month on month values dropped for the first time in seven years in spring. The Zillow report says that it is a stronger confirmation that housing markets are stabilising as opposed to on the brink of an imminent downturn.
The biggest growth in prices was in Salt Lake City, up 9.3% from June 2018. Followed by a rise of 8.8% in Indianapolis and a rise of 7.7% in Charlotte while notable West Coast markets flat lined, with Los Angeles up 0.9%, Seattle up 0.4% and San Francisco unchanged.
San Jose, which last year saw a nation leading annual growth rate of 23.4%, was the only market to see annual home values fall with a decline of 8.2%.
‘As much as record numbers of new apartments led many to believe that rental markets might have become over saturated with new supply, the reality is that demographics and general economic health continue to keep the pressure on,’ said Skylar Olsen, Zillow director of economic research.
‘We saw rents fall in 2018, but that was driven by the concentration of supply in urban areas and large buildings at higher end price points competing against each other. What the rental market still craves are affordable units spread across the landscape,’ Olsen added.
Inventory fell 0.8% year on year, the fourth straight month of declines after inventory rose at the start of the year. The most significant drop was in Kansas City, which saw 31.6% fewer homes for sale than this time last year.
Markets with the largest inventory growth can be found in the west, led by Las Vegas, up 54.3%, San Jose up 37.2%, Salt Lake City up 21.3% and San Francisco up 20.8%.