Single-family and multifamily rents used to move together like an old married couple. Not anymore. The gap between them just hit 29.7% nationally, more than double the pre-pandemic spread, and in some Sun Belt metros multifamily is down double digits while SFR grinds to new highs. Congratulations to anyone who bought a rental house instead of a mid-rise in 2020.

Story: According to Zillow's Observed Rent Index (ZORI), the national gap between single-family and multifamily asking rents hit 29.7% in June, more than double the 12-14% pre-pandemic spread. Single-family rents rose 2.8% year-over-year, twice the 1.4% multifamily pace. Zillow's own June rent report confirmed single-family at $2,320 (up 3.0%) versus multifamily at $1,789 (up 1.5%). Meanwhile Rentometer's mid-year 2026 report using different methodology (3-bedroom SFR asking rents across 1,099 cities) says national SFR rents actually fell 1.6% year-over-year in the first half, with 49% of markets recording annual declines.

So What? The two rental sectors are now running on completely different physics. Multifamily got flattened by the 2021-2023 delivery wave (highest apartment completions since the mid-1980s) at the exact moment population growth slowed to a crawl. Single-family had its own supply story via build-to-rent (BTR), but demand from priced-out would-be buyers is soaking up units faster than BTR can deliver. For anyone underwriting a new deal, this means the "average rent growth" number in your pro forma is basically fiction. You need product-specific and metro-specific comps or you will underwrite the wrong asset class.

What’s Next? Two data points to circle. First, Invitation Homes and AMH earnings on July 30 and August 1. Both are pure-play SFR REITs and their same-store rent growth guidance will confirm or refute the "3% and accelerating" ZORI number. Second, watch the National Multifamily Housing Council (NMHC) Rent Payment Tracker in early August. If MF rent collections are softening alongside asking rents, the divergence with SFR gets structurally uglier and lenders start pricing in different cap rates for the two asset classes explicitly. The old rule that rental housing moves as one market is dead. Underwrite accordingly.

Source: Zillow

Why the 1% Rule Doesn't Work Anymore (Use These 3 Metrics Instead)

The 1% rule was a useful shortcut when interest rates were 4% and home prices were flat — it isn't anymore. In this video, Matthew Whitaker, founder of Evernest and author of How to Rent Your Home, explains why the 1% rule breaks down in today's market and walks through the three metrics he uses instead across 15,000 rentals in 50 cities: cash on cash return, IRR, and DSCR. He also shows a deal that fails the 1% rule but is actually great, and one that passes but is actually terrible.

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