Median rents rose 3% from January 2011 to January 2012, but home values continued to fall, declining 4.6% during that period, according to new data from Seattle-based Zillow.
The Zillow Rent Index (ZRI), which is being released for the first time, showed year-over-year rental gains for 69.2% of metropolitan areas covered by the ZRI. By contrast, only 7.3% of metro areas covered by the Zillow Home Value Index (ZHVI) saw home values rise. In the short term, national monthly rents declined slightly from December 2011 to January 2012, falling 0.3% to $1,218. Home values fell 0.5% during the same period to $146,200.
Zillow points out that in some large markets, rents rose almost as much as values fell. In the Chicago metro area, for example, the ZRI rose 9.1% year-over-year, while home values fell 10.4% during the same period. In the Minneapolis-St. Paul metro area, rents rose 11% and home values fell 8.1%.
‘The flourishing rental market is the silver lining to the nation's housing downturn,’ says Stan Humphries, Zillow chief economist. ‘We haven't had a good way to quantify what is happening with rental rates until now, and the inaugural Zillow Rent Index shows us a healthy and growing rental market across the majority of the country, even as home values continue to fall.’