Single-Family Rent Growth Rate Slips Again
CoreLogic, Irvine, Calif., said rent prices in single-family rental properties increased three percent year-over-year in August, down slightly year over year.
Single-family rents increased 3.1 percent in August 2018, CoreLogic said.
“National rent increases have settled in around three percent over the past year and the rate of increase for entry-level rentals has eased over the past six months,” said CoreLogic Principal Economist Molly Boesel. “However, home-buying affordability remains a top concern across generations and is keeping many consumers in the rental market.”
Boesel noted if more consumers remain in the rental market rather than buying a home, “we may see another uptick in rent price growth in the coming year, particularly in urban areas where we’re seeing increasing demand from millennials,” she said.
CoreLogic reported rent increases on entry-level SFR properties outpaced higher-end assets. SFR properties with rent prices below 75 percent of the regional median increased 3.7 percent year-over-year in July while properties with rent prices exceeding 125 percent of a region’s median rent saw just 2.7 percent year-over-year increases.
August marked the 64th consecutive month in which low-end rentals propped up national SFR property rent growth, Boesel said.
Morningstar Credit Ratings LLC, New York, said the average vacancy rate for single-borrower single-family rental securitizations increased 20 basis points in August to 4.7 percent. The average retention rate for expiring leases increased to 78.5 percent in July from a revised 77.2 percent in June.
Among the 20 largest metros, the Denver-Aurora, Colo. area continued to have the highest vacancy rate at 8.9 percent, followed by the Fort Lauderdale, Fla. area with a 6.4 percent vacancy rate. The Phoenix metro experienced the highest blended rent growth at 7.3 percent; it has remained at or over 7.0 percent for the past eight months. The Sacramento, Calif., metro ranked second with seven percent rent growth.
The single-family rental market accounts for half the nation’s rental housing stock, CoreLogic said.
Single-family rent prices have climbed since 2010. “However, overall year-over-year rent price increases have slowed since February 2016,” CoreLogic’s Single Family Rent Index report said. SFR rents peaked at 4.1 percent that month.