Look, according to Zillow Research, we're seeing a meaningful shift in the rental market right now. The typical asking rent across the country hit $1,962 in July, and what's important is that this represents the fastest annual growth we've seen in over a year, coming in at 2.3% year over year. The big story here is that the rental market is tightening up after a couple of years where renters really had it good. All those new apartments that flooded the market gave tenants negotiating power and plenty of deals to choose from, but that wave is starting to slow down. We're seeing multifamily permits running significantly below where they peaked a few years back, which means less new supply hitting the ground.
What's interesting is that even with rents climbing faster, property managers still aren't pulling back on concessions too much. Right now about four out of every ten rental listings still comes with some kind of incentive or deal attached. However, this is starting to look less like a renter's advantage and more like builders in certain markets working through excess inventory. In places like Charlotte, Denver, and Dallas that built aggressively, you're seeing concession rates above sixty-five percent. But in markets that didn't build as heavily, it's a completely different story.
Here in our part of the world, the numbers tell you exactly where the pressure is. San Francisco rents have jumped nearly ten percent year over year, running around $3,372, while San Jose is up seven percent at $3,782. That's a sharp contrast to what's happening in those oversupplied markets back east where builders are still offering deals to fill units.
The affordability picture is shifting too. Nationally, renters are spending roughly twenty-six point eight percent of their income on housing, which is still below that thirty percent threshold we consider manageable. But here's what's driving long-term demand: it's much cheaper to rent than to buy. You need close to seventy-nine thousand dollars in annual income to comfortably afford a typical rental, but nearly one hundred thousand to afford buying a typical home. With mortgage rates sitting above six and a half percent, a lot of people who would normally be buying are staying renters, and that demand isn't going anywhere.
One more detail worth noting is that single-family rentals are accelerating much faster than apartment rentals, climbing three percent compared to one point seven percent for apartments. That's because most of the recent construction boom focused on multifamily buildings. As those apartments get absorbed and absorbed, we should expect multifamily rents to accelerate to match the single-family trend.
What I am seeing locally is that our market's fundamentals remain stronger than most other places because we never had that oversupply problem. Our Bay Area renters and buyers should understand that while the broader national market is correcting itself, the supply constraints we've dealt with mean we're not going to see the kind of relief or concessions that tenants back east are getting. For sellers, this backdrop suggests continued stability in the rental market, and for buyers considering whether to rent or buy, that income gap in favor of renting is still meaningful enough to keep them patient on the sidelines.
