Multifamily rental prices recovered to a greater extent than single-family prices post-crisis in key major markets surveyed by Moody’s Investors Services, including Boston, Chicago, Los Angeles, New York, San Francisco and Washington, D.C.

For the six major markets, the post-crisis apartment price recovery has been strong and is now approximately 20% above the peak they saw in the fourth quarter of 2007.

Although single-family prices in the same markets peaked six quarters earlier, the recovery has been weaker and prices are currently roughly 20% below the second quarter 2006 peak.

“Apartment prices peaked six quarters later, but the recovery has nevertheless been stronger,” said Tad Philipp, Moody's director of commercial real estate research. “Single-family prices are 20% below their Q2 2006 peak.”

The biggest apartment price gains relative to their pre-crisis peaks were in San Francisco and New York.

“However, the greatest discrepancy between apartment and single-family prices was in San Francisco,” Philipp said.

This trend is bigger than just the key six cities in the Moody's report.

Buying costs less than renting in all 100 large U.S. metros, according to the Rent vs. Buy Report from Trulia (TRLA). Rising mortgage rates and home prices have narrowed the gap between renting and buying, though rates have recently dropped and price gains are slowing.

Low mortgage rates have kept homeownership from becoming more expensive than renting. In some markets, like San Francisco and Seattle, rents have risen sharply; rising rents hurt affordability relative to incomes, but rising rents make buying look cheaper in comparison.

Apartment prices rose 46% since the pre-crisis peak in San Francisco compared with single-family prices that are 17% below their pre-crisis peak.

The difference between the sectors was more moderate in New York, with apartment prices 28% above the pre-crisis peak, compared with single-family prices 20% below the pre-crisis peak.

Other findings from this month's Moody's/RCA report include:

  • The national all-property composite index increased 1.2% in January, driven by a 1.5% increase in core commercial prices. Apartment prices rose 0.6%.
  • Apartment prices are 6.4% above their pre-financial crisis peak, while core commercial property prices are 11.9% below peak.
  • Core commercial price gains of 17.9% over the last 12 months have exceeded gains of 12.8% in the apartment sector.
  • Prices in the industrial and suburban office sectors have increased in the low double digits, while retail and central business district office price increases have been roughly 10 percentage points higher.
  • Price increases in major markets have closely tracked those in non-major markets over the last three- and12-month periods. Prices in major markets are 3% above the November 2007 pre-crisis, while prices in non-major markets are approximately 16% below peak.