Highest Potential SFR Returns in New York City, Atlantic City, Birmingham, Mobile and Odessa areas; Best Yields Concentrated in Midwest and South, Lowest in West; Rental Profit Margins Decreasing in More Than Half of Nation
IRVINE, Calif. – Mar. 13, 2025 — ATTOM, a leading curator of land, property data, and real estate analytics, today released its Q1 2025 Single-Family Rental Market report, which ranks the best U.S. markets for buying single-family rental properties in 2025.
The report analyzed single-family rental returns in 361 U.S. counties with sufficient rental and home-price data. The analysis for this report incorporated median rents and median home prices collected from ATTOM’s nationwide property database, as well as publicly recorded sales deed data licensed by ATTOM (see full methodology below).
The report shows that the annual three-bedroom gross rental yield (annualized median gross rent income divided by median purchase price) among the 361 counties analyzed is projected to be 7.45 percent in 2025. That is down slightly from an average of 7.52 percent in those same markets during 2024.
Yields are declining from 2024 to 2025 in nearly 60 percent those counties after growing in a small majority from 2023 to 2024.
Investment returns for landlords are slipping as home prices are going up faster than rents across slightly more than half the country. From 2024 to 2025, median single-family home prices rose more than median three-bedroom rents in 54 percent, of the markets analyzed. The gaps – usually more than three percentage points – pushed rental yields downward.
That has happened even as the nation’s ongoing rise in home values around the country has made home ownership less affordable for average wage earners. Price spikes have helped push marginal home seekers out of the purchase market toward rentals, putting upward pressure on rents. But rising prices also have made it tougher for investors by boosting their buy-in costs.
“The fallout from rising single-family home values is proving beneficial for long-time landlords, as increasing property prices drive rents higher. However, for new investors entering the rental market, conditions are becoming more challenging nationwide,” said Rob Barber, CEO at ATTOM. “Unless home prices stabilize or more properties become available for sale, this trend is likely to persist in the near future.”
Over the past year, median single-family home prices have gone up in about two-thirds of the counties with enough data to review, with increases generally ranging up around 10 percent. At the same time, typical three-bedroom rents have increased in barely more than half those areas, with gains mostly topping out at roughly 7 percent.
Top rental returns in Suffolk, Atlantic, Jefferson, Mobile and Ector counties, as well as the Midwest and other parts of the South
Counties with the highest potential annual gross rental yields on three-bedroom properties for 2025 are Suffolk County, NY, in the New York City metro area (18 percent); Atlantic County, NJ, in the Atlantic City area (16.8 percent); Jefferson County, AL, in the Birmingham area (13.6 percent); Mobile County, AL (12.9 percent) and Ector County, TX, in the Odessa area (12.5 percent).
Aside from Suffolk County, the highest potential annual three-bedroom gross rental yields in 2025 among counties with a population of at least 1 million are in Wayne County (Detroit), MI (10.9 percent); Cuyahoga County (Cleveland), OH (10.1 percent); Allegheny County (Pittsburgh), PA (9.8 percent) and Cook County (Chicago), IL (9.2 percent).
Rental returns decrease across majority of nation
Potential annual three-bedroom gross rental yields for 2025 have gone down compared to 2024 in 57 percent of the counties analyzed in the report. The biggest drop-offs are in Litchfield County, CT (outside Hartford) (yield down from 17.1 percent in 2024 to 11.7 percent in 2025); Champaign County, IL (down from 12.5 percent to 9.3 percent); Monroe County (Rochester), NY (down from 12.6 percent to 9.8 percent); Santa Barbara County, CA (down from 10 percent to 7.4 percent) and Mercer County (Trenton), NJ (down from 11.8 percent to 9.8 percent).
The biggest decreases in potential annual gross rental yields from 2024 to 2025 among counties with a population of at least 1 million are in Los Angeles County, CA (yield down from 7.1 percent in 2024 to 6.1 percent in 2025); Palm Beach County (West Palm Beach), FL (down from 7.6 percent to 6.8 percent); Wayne County (Detroit), MI (down from 11.7 percent to 10.9 percent); Riverside County, CA (down from 9.5 percent to 8.7 percent) and Allegheny County (Pittsburgh), PA (down from 10.4 percent to 9.8 percent).
Lowest rental returns in San Francisco, San Jose and Nashville metro areas as well as other western markets
Counties with the lowest potential annual gross returns for 2025 on three-bedroom rentals are Santa Clara County, CA, in the San Jose metro area (2.9 percent); San Mateo County, CA, in the San Francisco area (3.3 percent); Williamson County, TN, in the Nashville area (3.4 percent); Walton County, FL, in the Crestview-Fort Walton Beach area (3.7 percent) and Alameda County, CA, in the San Francisco area (3.8 percent).
Aside from Santa Clara and Alameda counties, the lowest potential annual gross three-bedroom rental yields in 2025 among counties with a population of at least 1 million are in Honolulu County, HI (4.1 percent); Fairfax County, VA in the Washington, DC, metro area (4.2 percent) and Kings County (Brooklyn), NY (4.2 percent).
Wages rising faster than rents rising in two-thirds of counties measured
Average wages are growing faster than median three-bedroom rents in 69 percent of the counties analyzed, including Los Angeles County, CA; Cook County (Chicago), IL; Harris County (Houston), TX; Maricopa County (Phoenix), AZ, and San Diego County, CA.
Median three-bedroom rents are increasing faster than average wages in 31 percent of the counties measured, including Suffolk County, NY (outside New York City); Franklin County (Columbus), OH; Oakland County, MI (outside Detroit); Hennepin County (Minneapolis), MN, and Cuyahoga County (Cleveland), OH.
Home prices rising faster than rents in slightly more than half of nation
Median home prices are going up more than median three-bedroom rents in 196 of the 361 counties analyzed (54 percent). They include Los Angeles County, CA; Cook County (Chicago), IL; Maricopa County (Phoenix), AZ); San Diego County, CA, and Orange County, CA (outside Los Angeles).
Median three-bedroom rents prices are rising faster than median home prices in 165 of the counties analyzed (46 percent), including Harris County (Houston), TX; King County (Seattle), WA; Santa Clara County (San Jose), CA; Sacramento County, CA, and Philadelphia County, PA.
Wages rising faster than prices in majority of local markets
Average wages are increasing faster than median home prices in 60 percent of the counties analyzed, including Harris County (Houston), TX; Maricopa County (Phoenix), AZ; Orange County, CA (outside Los Angeles); Dallas County, TX, and Riverside County, CA.
Median home prices are increasing faster than average wages in 40 percent of the counties analyzed. They include Los Angeles County, CA; Cook County (Chicago), IL; San Diego County, CA; Miami-Dade County, FL, and Kings County (Brooklyn), NY.
Best SFR growth markets include Detroit, Cleveland and Memphis
The report identified 28 “SFR Growth” counties where average wages grew over the past year and potential 2025 annual gross three-bedroom rental yields exceed 10 percent.
The 28 SFR Growth markets include Wayne County (Detroit), MI; Suffolk County, NY (outside New York City); Cuyahoga County (Cleveland), OH; Shelby County (Memphis), TN, and Hidalgo County (McAllen), TX.
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Methodology
For this report, ATTOM looked at U.S. counties with sufficient home price and rental rate data. ATTOM used single-family, home price data from its publicly recorded sales deed data, as well as three-bedroom rental data, collected and licensed by ATTOM. The analysis also incorporated second-quarter 2024 average weekly wage data from the Bureau of Labor Statistics (most recent available).
About ATTOM
ATTOM provides premium property data and analytics that power a myriad of solutions that improve transparency, innovation, digitization and efficiency in a data-driven economy. ATTOM multi-sources property tax, deed, mortgage, foreclosure, environmental risk, natural hazard, and neighborhood data for more than 155 million U.S. residential and commercial properties covering 99 percent of the nation’s population. A rigorous data management process involving more than 20 steps validates, standardizes, and enhances the real estate data collected by ATTOM, assigning each property record with a persistent, unique ID — the ATTOM ID. The 30TB ATTOM Data Warehouse fuels innovation in many industries including mortgage, real estate, insurance, marketing, government and more through flexible data delivery solutions that include ATTOM Cloud, bulk file licenses, property data APIs, real estate market trends, property navigator and more. Also, introducing our newest innovative solution, making property data more readily accessible and optimized for AI applications – AI-Ready Solutions.
Media Contact:
Megan Hunt
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Data and Report Licensing:
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Written by: ATTOM Team