Zillow's full-year 2026 rental outlook projects single-family rent growth decelerating to just 1.1% annually by December, with multifamily rents nearly flat at -0.2%. At the same time, the typical household is now spending 26.4% of income on rent -- the lowest share since August 2021. Slower growth and easier affordability sound like they should pull DSCR underwriting in opposite directions. They don't. Here's how to read both numbers together.
The Numbers
Zillow, 2026 outlook: Single-family rents projected +1.1% annually by December | Multifamily rents: -0.2% | Rent as a share of income: 26.4%, the lowest since August 2021
Two Numbers, Not a Contradiction
Zillow's mid-August single-family rent index put annual growth at a snappier 3% year-over-year -- the fastest pace in over a year, as we covered in an earlier post. That's not inconsistent with a 1.1% full-year pace by December; it means growth accelerated earlier in the year and is now decelerating into the back half. Both readings are correct at the moment each was taken -- the trend line is what matters, and the trend line is bending down, not up.
What Decelerating Growth Means for Rent Bumps
If you're underwriting a DSCR deal with an assumption that rent will keep climbing at the pace it grew earlier this year, that assumption is now the more aggressive end of a realistic range, not the base case. Use the current in-place or comparable rent for qualifying math, and treat any built-in rent-growth assumption for future years conservatively -- Zillow's own forecast has the national pace roughly a third of where it stood mid-year.
The Upside Hiding in the Affordability Number
A falling rent-to-income ratio isn't just a renter-friendly headline -- it's a landlord-relevant one. Tenants who are less cost-burdened are statistically less likely to fall behind on rent or move out to chase a cheaper unit, which is the input that actually drives vacancy and turnover cost, not the topline rent-growth rate. Slower rent growth paired with improving affordability can mean a more stable resident base even if the top-line rent number climbs more slowly than it did a year ago.
| Topline growth | Slowing -- from a 3% mid-year read toward a 1.1% full-year pace |
|---|---|
| Affordability | Improving -- rent burden at its lowest since August 2021 |
| Net effect on underwriting | More conservative rent-growth assumptions, offset by lower expected turnover and vacancy risk |
What to Do With This Before Your Next Application
- Qualify on current, verifiable rent -- not a projected future rent bump the national deceleration trend doesn't support
- If a deal only works with an assumed 3%+ annual rent increase built in, treat that as a red flag rather than a conservative estimate right now
- Factor improving affordability into your vacancy and turnover assumptions, not just your rent-growth assumptions -- both feed into the deal's real risk profile
- Re-check metro-level data before finalizing numbers -- national deceleration doesn't move every market at the same pace
The Bottom Line
Rent growth slowing isn't the same as rent growth stopping, and improving affordability isn't a threat to a DSCR deal -- it's a tailwind for tenant retention. Underwrite off where the trend is actually heading into year-end, not off the fastest single-month read of the year, and the affordability side of this data works in your favor rather than against it.