by Dan Rafter
Landlords looking to make the most money by renting out single-family homes shouldn’t focus on the Midwest. Just two Midwest cities showed up in HomeUnion’s latest list of the 20 U.S. markets in which the monthly rents on single-family homes are growing at the fastest clip.
HomeUnion’s list isn’t looking at growth in apartment rental rates, just at the rates that consumers are paying to rent single-family homes across the United States. This is a much smaller market, of course, than the multifamily apartment market.
Still, the Midwest isn’t represented well here.
Only Cleveland and Memphis made HomeUnion’s list. Cleveland ranked 14th on the company’s list. According to HomeUnion, the average monthly single-family residence rent stood at $1,200 in December. That’s an increase of 3.2 percent from one year earlier.
Memphis took the 20th spot in HomeUnion’s list, with the average rent for a single-family home standing at $1,040 in December of last year. That’s up 2.1 percent from a year earlier.
These rent growths, though, can’t touch what HomeUnion found in Seattle, the city that topped the company’s list. According to HomeUnion, the average single-family residence rent in Seattle was $2,220 in December, up 6.7 percent from a year earlier.
Four Midwest cities, though, did make HomeUnion’s other list, the ranking of those 20 U.S. markets in which single-family residence rents grew the slowest year-over-year. Wichita, Kansas, ranked fourth on this list, with an average single-family residence rent of $1,00, a drop of 4.3 percent from a year earlier.
Milwaukee came in 13th place, with an average rent of $1,280, a increase of just 0.8 percent from a year ago. Chicago took the 16th spot, with an average rent of $1,580, up 1.3 percent from 2015. Indianapolis was right behind, in 16th place. Its average single-family residence rent was $1,160, up just 1.4 percent from a year earlier.
“Many of the metros at the top of our list have these two common characteristics: strong job growth, and residents who prefer renting over homeownership as median home prices remain relatively high and the cost of mortgage debt continues to increase,” said Steve Hovland, director of research at HomeUnion, in a statement.