ATTOM has released its Q1 2024 Single-Family Rental (SFR) Market report, ranking the top U.S. markets for purchasing single-family rental properties in 2024.
According to the report, the average yearly three-bedroom gross rental yield (annualized gross rent income divided by median purchase price) across the 341 counties evaluated is expected to be 7.55% in 2024. That is somewhat higher than the average of 7.39% in those same markets a year ago, and marks the second year of growing estimates following three years of reductions.
Landlords’ investment returns are increasing as rents rise slightly faster than housing prices across the bulk of the country. From 2023 to 2024, median three-bedroom rents increased faster than median single-family home prices in 216—or roughly 63%—of the areas studied. Research showed that the differences were small, usually less than one percentage point, but enough to raise rental yields.
This occurred as a result of a combination of market conditions that boosted rental demand. They include a historically low supply of homes for sale and price hikes that have slowed but not sufficiently to make homeownership universally affordable for average wage earners.
“The U.S. home sales market cooled off a good bit last year, with some of the weakest gains over the past decade. But that wasn’t enough to make home prices affordable for most workers, which likely fed enough demand to push up rents and yields for investors who lease out single-family properties,” said Rob Barber, CEO at ATTOM. “The fact that so few homes are available for sale in many markets clearly further helped increase rental demand for landlords and boost their bottom lines.”
Best SFR Growth Markets Include Chicago, Detroit, and Cleveland
The analysis identified approximately 28 “SFR Growth” counties where average earnings increased in the previous year and prospective 2024 annual gross three-bedroom rental yields exceeded 10%.
The 28 SFR Growth markets measured include:
- Cook County (Chicago), IL
- Wayne County (Detroit), MI
- Cuyahoga County (Cleveland), OH
- Allegheny County (Pittsburgh), PA
- Shelby County (Memphis), TN
Rental Returns Increase Across Majority of U.S.
Potential yearly three-bedroom gross rental yields for 2024 have improved by 63% compared to 2023 in 216 of the 341 counties studied in the report. They are led by:
- Taylor County (Abilene), TX (yield up from 7.6% in 2023 to 11.3% in 2024)
- Jefferson County (Birmingham), AL (up from 8.5% to 12.1%)
- Richmond County (Augusta), GA (up from 9.6% to 12.7%)
- Midland County, TX (up from 8.7% to 11.7%)
- Aiken County, SC (outside Augusta, GA) (up from 8.4% to 11.1%)
The biggest increases in potential annual gross rental yields from 2023 to 2024 among counties with a population of at least 1 million are in Riverside County, CA (yield up from 7.4% in 2023 to 9.7% in 2024); Los Angeles County, CA (up from 5.6% to 7.1%); Fulton County (Atlanta), GA (up from 6% to 6.8%); Montgomery County, MD (outside Washington, DC) (up from 4.4% to 5.2%) and Dallas County, TX (up from 7.4% to 8.1%).
Metro areas with a population of 1 million of more showing decreases in potential gross three-bedroom rental yields from 2023 to 2024 are led by Kings County, Brooklyn, NY (yield down from 8% to 4.4%); Cook County (Chicago), IL (down from 11% to 10.1%); Wayne County (Detroit), MI (down from 12.8% to 12%); Miami-Dade County, FL (down from 7.9% to 7.3%) and Nassau County, NY (outside New York City) (down from 7.1% to 6.8%).
Top Rental Returns in Indian River, St. Louis, Cameron, Monroe, and Richmond Counties
Counties with the highest potential annual gross rental yields on three-bedroom properties for 2024 are:
- Indian River County, FL, in the Sebastian-Vero Beach metro area (14.6%)
- St. Lous City, MO, (14.6%)
- Cameron County, TX, in the Brownsville-Harlingen metro area (13.2%)
- Monroe County, NY, in the Rochester metro area (12.8%)
- Richmond County, GA, in the Augusta-Richmond County metro area (12.7%)
The highest potential annual three-bedroom gross rental yields in 2024 among counties with a population of at least 1 million are in Wayne County (Detroit), MI (12%); Allegheny County (Pittsburgh), PA (11.2%); Cuyahoga County (Cleveland), OH (10.2%); Cook County (Chicago), IL (10.1%) and Riverside County, CA (9.7%).
Lowest Rental Returns in San Francisco, San Jose, Nashville, and Washington, D.C., Metro Areas
Counties with the lowest potential annual gross returns for 2024 on three-bedroom rentals are:
- Santa Clara County, CA, in the San Jose metro area (3%)
- San Mateo County, CA, in the San Francisco metro area (3.4%)
- Arlington County, VA, in the Washington, DC, metro area (3.8%)
- Williamson County, TN, in the Nashville metro area (3.9%)
- San Francisco County, CA (3.9%)
Aside from Santa Clara County, CA, the lowest potential annual gross three-bedroom rental yields in 2024 among counties with a population of at least 1 million are in Honolulu County, HI (4.1%); Fairfax County, VA (outside Washington, D.C.) (4.2%); Kings County (Brooklyn), NY (4.4%) and Alameda County (Oakland), CA (4.4%).
Rents Rising Faster Than Wages in Most U.S. Counties Analyzed
Median three-bedroom rents are rising faster than average salaries in 197 of the 341 counties studied (58%), including Los Angeles County, CA; Harris County (Houston), TX; Maricopa County (Phoenix), AZ); San Diego County, CA; and Orange County, CA (outside Los Angeles).
In 144 of the 341 counties studied, average incomes are rising faster than median three-bedroom rents (42%), including Cook County (Chicago), IL; Miami-Dade County, FL; Kings County (Brooklyn), NY; Queens County, NY; and San Bernardino County, CA.
To read the full report, including more data, charts, and methodology, click here.
