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After strengthening in the first half of this year, single-family home rents began to slow in July. This could be a sign that as the consumer struggles, landlords are going to have to move to meet them. 

Single-family rent prices in July increased 2.3% from the same month last year, which is slower than the 3.1% average increase a year ago, according to the latest data from Cotality. Rent growth has now fallen below the lower end of the 10-year average range of pre-pandemic growth. 

“After a strong start to the year, single-family rent growth is clearly losing steam,” said Molly Boesel, senior principal economist at Cotality. “In July, we broadly saw weakening in annual single-family rent growth across metro areas and price tiers.”

Rent growth was just 0.2% higher in July compared with June, which is far below the historical July average monthly growth of 0.7%. That is a notable shift from monthly gains that had been stronger than usual earlier this year. 

“Even markets like Los Angeles, which had been buoyed by post-wildfire demand, are now cooling off. Chicago stands out as the exception, leading the nation in rent growth amid tight inventory and resilient demand,” said Boesel. 

Looking just at the 10 largest metropolitan markets, Chicago was in the lead at 5.1% rent growth, and the New York City metropolitan area came in second at 3.7% growth. Philadelphia and Washington, D.C., followed, and while Los Angeles is slowing, it still rounds out the top five for rent growth. 

Dallas and Miami were the lowest of the 10, with Miami seeing no rent growth at all. Compare that to 2022, when pandemic-driven migration to the Suth caused Miami’s annual rent growth to soar 40%.

Rent growth also weakened at all price points. For high-end properties, national average rents increased 2.9% from a year ago, down from the 3.2% annual gain seen last July. The same trend was seen in low-end rents, which increased 1.6% annually in July, down from the 2.8% gain in July 2024.

Single-family rents had been doing much better than apartment rents over the last few years, as an enormous amount of supply came on the multifamily market. Single-family rentals were also in high demand due to the skyrocketing prices in the for-sale market. Families, which tend to be buyers, were opting for rental homes in good school districts instead. 

Single-family rental REITs, like Invitation Homes and American Homes 4 Rent, have actually been building more rental communities just to keep up with that demand, so it will be interesting to see if this latest weakening causes them to pull back. 

As Property Play noted in July, the largest single-family rental REITs were selling more homes than they were buying, according to a count by Parcl Labs. That, however, was because they were trying to consolidate away from standalone properties and more into full rental communities, some of which they were building.