BAM Key Details:

  • ATTOM released its Q1 2023 Single-Family Rental Return Market report, showing an increase in single-family rental (SFR) returns in 91% of the 212 counties analyzed. 
  • Markets with the highest SFR returns are concentrated in the Midwest, South, and Northeast while those with the lowest returns are concentrated in the West. 
  • Rents are growing faster than home prices in most of the country and faster than wages in two-thirds of the markets analyzed. 

ATTOM just released its Q1 2023 Single-Family Rental Market report, which analyzes 212 U.S. counties to measure changes in single-family rental (SFR) returns across the U.S. The latest report shows an increase in those rental returns in 91% of the markets analyzed, after 72% of experienced a decline from 2021 to 2022. 

Markets where single-family rentals had the highest returns were concentrated in the South, Midwest, and Northeast, while those with the lowest returns were concentrated in the West. 

ATTOM-Best-counties-to-buy-single-family-rentals-chart

Source: ATTOM

Rents on three-bedroom units have been growing faster than home prices over the past year, with rents rising by 5% to 20%, while changes in home prices have ranged from a 5% loss to a 5% gain. Rent growth has also been outpacing wage growth in two-thirds of the markets analyzed, taking a larger percentage of household income and putting additional strain on renters’ budgets. 

Here’s what you need to know. 

ATTOM’s Q1 2023 Single-Family Rental Market report

The ATTOM report measured single-family rental returns in 212 counties across the U.S. with populations of at least 100,000 and sufficient rental and home price data. 

The analysis focused on median rents for 3-bedroom units and median single-family home prices. The average annual gross rental yield (annualized gross rental income divided by purchase price) on three-bedroom units, according to the report, is projected to be 7.5% in 2023—up from the 2022 average of 6.7% in those same markets.

This is the first time since at least 2019 that single-family rental returns increased across the country. 

The broader housing market didn’t fare nearly as well in 2022 as it did in 2021. Prices finally hit the wall, at least temporarily. But that appears to be benefitting the growing number of investors around the U.S. who rent out single-family properties. Rents for single-family homes are growing while prices have flattened out, which has helped boost yields for landlords for the first time in at least several years.

Rob Barber

Chief Executive Officer at ATTOM

When soaring mortgage rates, consumer inflation at 40-year highs, and a slumping stock market took their toll on consumer purchasing power in 2022, it not only stalled an 11-year runup in home prices but also lowered the nationwide average by 8% in the second half. 

On the flip side, those changes allowed rental yields to rise, benefitting landlords (including the accidental ones) while making it harder for renters to save money

Falling home prices could raise those rental yields even more, but they could also heat up demand for homes and get more prospective buyers off the sidelines—and out of rentals. 

Counties with the highest single-family rental returns

Of the 212 counties in ATTOM’s analysis, those with the highest potential annual gross single-family rental (SFR) yields for 2023 are— 

  • Indian River County, FL, in the Sebastian-Vero Beach metro area (15%)
  • Collier County, FL, in the Naples metro area (14.7%) 
  • Wayne County, MI, in the Detroit metro area (13 percent); 
  • Mercer County, NJ, in the Trenton metro area (12.7 percent) and 
  • Charlotte County, FL, in the Punta Gorda metro area (12 percent)

Aside from Michigan’s Wayne County, the greatest annual gross single-family rental yields among counties with populations of at least one million are in— 

  • Cook County (Chicago), IL (11.5%)
  • Cuyahoga County (Cleveland), OH (10.1%)
  • Oakland County, MI (outside Detroit) (9.1%)
  • Palm Beach County (West Palm Beach), FL (8.5%)

The top 50 single-family rental returns for counties in ATTOM’s 2023 analysis include— 

  • 29 in the South
  • 13 in the Midwest
  • 8 in the Northeast 

None of the top 50 markets are in the West.

Rental returns increased in most counties

Potential annual gross single-family rental yields increased In 192 of the 212 counties in ATTOM’s 2023 analysis, compared to 2022. 

The top five counties with the biggest SFR increases—  

  • Orange County, CA (outside Los Angeles) (up 42.7%) 
  • San Mateo County, CA (outside San Francisco) (up 41.6%) 
  • Suffolk County (Boston), MA (up 41.2%) 
  • New Castle County (Wilmington), DE (up 40.5%)
  • San Francisco County, CA (up 38.1%)

Aside from Orange County, those with populations of at least one million that experienced the biggest SFR increases from 2022 to 2023: 

  • Miami-Dade County, FL (up 34.1%) 
  • Broward County (Fort Lauderdale), FL (up 32.4%) 
  • Santa Clara County (San Jose), CA (up 30.1%)
  • Palm Beach County (West Palm Beach), FL (up 29.5%)

Only three of the counties in ATTOM’s report with populations of one-million-plus show declines in potential gross single-family rental yields from 2022 to 2023:  

  • St. Louis County, MO (down 19.8%)
  • Nassau County, NY (outside New York City) (down 2.2%) 
  • Collin County (Plano), TX (down 0.4%)

Counties with the lowest single-family rental returns

The top five counties with the lowest potential annual gross SFR returns for 2023: 

  • Santa Clara County, CA, in the San Jose metro area (3.3%)
  • San Mateo County, CA, in the San Francisco metro area (3.7%)
  • Utah County, CA, in the Provo metro area (3.8%)
  • Honolulu County in the Honolulu, HI, metro area (4.2%)
  • Loudoun County, VA (4.2%)

Aside from Santa Clara and Honolulu counties, the lowest potential annual gross SFR returns among counties with populations of at least one million are in— 

  • Alameda County (Oakland), CA (4.3%) 
  • Fairfax County, VA (outside Washington, D.C.) (4.3%) 
  • Montgomery County, MD (outside Washington, D.C.) (4.5%)

Of the bottom 50 counties analyzed for potential SFR returns in 2023, 34 are in the West, and 14 are in the South. The Midwest and Northeast have only one each. 

Rents are growing faster than wages in two-thirds of counties analyzed

In 147 of the 212 counties measured by ATTOM (69%), rents are rising faster than wages. Those counties include— 

  • Los Angeles County, CA
  • Cook County (Chicago), IL
  • Harris County (Houston), TX
  • San Diego County, CA
  • Orange County, CA (outside Los Angeles)

Wages are growing faster than rents in 65 of those 212 counties (31%), including— 

  • Maricopa County (Phoenix), AZ
  • Dallas County, TX
  • Clark County (Las Vegas), NV
  • Tarrant County (Fort Worth), TX
  • Hillsborough County (Tampa), FL

Rents are growing faster than home prices in 91% of counties analyzed

Rents are growing faster than home prices in 192 of the 212 counties (91%) in ATTOM’s report, including— 

  • Los Angeles County, CA
  • Cook County (Chicago), IL
  • Harris County (Houston), TX
  • Maricopa County (Phoenix), AZ
  • San Diego County, CA

Home price growth is outpacing rent growth in only 20 of those 212 counties (9%), including— 

  • Nassau County, NY (outside NYC)
  • Collin County (Plano), TX
  • Pima County (Tucson), AZ
  • St. Louis County, MO
  • Westchester County, NY (outside NYC)

Wages are growing faster than home prices in over 75% of markets

Wage growth is outpacing home price growth in 169 of the 212 counties analyzed by ATTOM (80%), including—

  • Los Angeles County, CA
  • Cook County (Chicago), IL
  • Harris County (Houston), TX
  • Maricopa County (Phoenix), AZ
  • San Diego County, CA

Home prices are rising faster than wages in 43 of those 212 counties (20%), including— 

  • Collin County (Plano), TX
  • St. Louis County, MO
  • Westchester County, NY (outside NYC)
  • Hartford County, CT
  • Macomb County, MI (outside Detroit)

Top SFR growth markets include Chicago, Detroit, and Cleveland

ATTOM’s report identified 17 of the 212 counties as “SFR GRowth” markets where wages grew from 2022 to 2023 and potential annual SFR returns for 2023 exceed 10%. 

Those 17 SFR Growth counties include— 

  • Cook County (Chicago), IL
  • Wayne County (Detroit), MI
  • Cuyahoga County (Cleveland), OH
  • Shelby County (Memphis), TN
  • New Haven County, CT

ATTOM report methodology

For this report, ATTOM, a leading curator of land, property, and real estate data, looked at 212 U.S. counties with populations of at least 100,000 and with sufficient rental and home price data. 

Rankings for single-family rental returns is based on three-bedroom median priced rental data collected and licensed by ATTOM, which also used single-family home price data to compare growth rates. ATTOM’s analysis also incorporated Q2 2022 average weekly wage data from the Bureau of Labor Statistics. 

Top takeaways for real estate agents

As a real estate professional, you need to stay current on how the cost of renting compares to the cost of homeownership in your local market. 

If, for example, renters in your area are struggling to afford rent increases and noticing a decline in home prices, more of them are likely to be curious as to whether it’s a good time to buy and potentially lock in a lower monthly housing payment—on a home they actually own. 

Be prepared to show them a detailed comparison of the costs, so they can make informed decisions—and so they know an agent they can trust when they’re ready to buy.