ATTOM says rental yields are falling in 55% of counties

"Many landlords have been able to offset higher acquisition costs with rent growth, but returns are tightening in a majority of counties. 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."

"Midwest markets showed some of the strongest potential rental returns for 2026. Counties with the highest projected yields for three-bedroom rental properties included St. Clair County, Illinois (14.5%); Mobile County, Alabama (13.6%); Peoria County, Illinois (12.5%); St. Louis County, Minnesota (11.6%); and Trumbull County, Ohio (11.5%)."

"Some high-cost markets posted the lowest projected yields. Counties with the weakest returns included Walton County, Florida (3.1%); Santa Clara County, California (3.1%); Williamson County, Tennessee (3.3%); Loudoun County, Virginia (3.6%); and San Mateo County, California (3.7%)."

Rental property investor profitability is declining despite continued rent increases in many areas. Median rents rose faster than home prices in 55% of analyzed counties, yet record national median home sales prices of $360,000 are raising acquisition costs and compressing yields. While landlords have offset some higher costs through rent growth, returns are tightening across most counties. Midwest markets demonstrate strongest potential returns, with counties like St. Clair County, Illinois showing 14.5% yields. High-cost markets show weakest returns, with some California and Florida counties below 3.2%. Wage growth has helped offset affordability pressures, rising faster than rents in 63% of counties and outpacing home prices in two-thirds of markets.

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