Rent increases are outpacing home-price growth in the majority of counties in the United States, shrinking the affordability gap between renting and buying, a new industry report shows.

Median rents rose at a greater rate than median sales prices in 229, or 55%, of the 416 counties with sufficient rent and price data to analyze between 2025 and 2026, according to Attom's Single-Family Rental Market report.

Despite this, rental yields declined in 54.8% of counties with sufficient data, as landlords faced higher upfront costs due to a record high national median sales price of $360,000 in 2025, which has also kept tenants in the rental market, the report said.

"Many landlords have been able to offset higher acquisition costs with rent growth, but returns are tightening in a majority of counties," Attom CEO Rob Barber said in a press release Thursday. "Even though rents and wages are rising in many markets, record-high home prices are compressing yields. Investors will need to be more selective, focusing on markets where rent growth and affordability trends continue to support strong returns."

Americans need to earn $111,252 per year to afford the median-priced home for sale, 46.3% more than the $76,020 they need to afford the typical rental. While still a large gap, it's the smallest it has been in three years, according to Redfin.

Affordability has been improving nationwide as the 30-year fixed rate mortgage dipped below 6% last week for the first time since 2022, FreddieMac found. But 26% of Americans said no mortgage rate would motivate them to buy right now, as 61% cited home prices as the biggest barrier, according to a survey conducted by HomeServe.

Which counties produced the highest returns

Midwestern counties should be top targets for investors this year, as the counties with the highest potential rental yields for three-bedroom apartments were Saint Clair County, Illinois (14.5%), Mobile County, Alabama (13.6%), and Peoria County, Illinois (12.5%).

On the flip side, California counties produced some of the lowest potential gross rental yields, as Santa Clara County and San Mateo County posted sub-4% yields. Santa Clara County also recorded the lowest potential yields among counties with populations of more than 1 million, the report showed.

Wages rose at a greater rate than three-bedroom rents in 63% of counties and median home sales prices in 66.8% of counties from 2025 to 2026. The largest counties that saw wages outpace rents were Los Angeles County, California, Harris County, Texas, Maricopa County, Arizona, San Diego County, California, and Orange County, California.

Attom also identified 18 counties where average wages increased over the past year and potential rental yields exceeded 10%, with the largest being Suffolk County, New York, Onondaga County, New York, and Lucas County, Ohio.

"As rental yields tighten nationwide, investors are being forced to think beyond price and rent growth," said Kyle Concannon, vice president of product and wholesale at Constructive Capital. "Mortgage brokers with their lending partners help bridge that gap by structuring financing that reflects today's economic reality."