Single-Family Rent Growth Reaches Another Record
CoreLogic, Irvine, Calif., said single-family rent growth reached 8.5 percent year-over-year in July, up from a 7.5 percent year-over-year rate in June.
The CoreLogic Single-Family Rent Index said July marked another month of rapid growth for the single-family rental market, with rent gains exceeding pre-pandemic rates across all price tiers for the fourth consecutive month. Strong economic and employment growth buoyed rent growth to a 16.5-year high, with the largest increases seen in single-family detached properties.
“Single-family rent prices continue to climb as national economic recovery, the overcrowded purchase market and deficient inventory puts pressure on the rental market,” said Molly Boesel, Principal Economist at CoreLogic. “With eviction moratoriums coming to a close this fall, and single-family rental inflation showing no signs of slowing over the next several months, affordability challenges may begin over the next several months, affordability challenges may begin to pose a more urgent concern for renters.”
National single-family rent growth across the four tiers equaled:
–Lower-priced SFR properties (75 percent or less than the regional median): 5.9 percent, up from 2.4 percent a year ago.
–Lower-middle priced (75 percent to 100 percent of the regional median): 7.2 percent, up from 1.6 percent in July 2020.
–Higher-middle priced (100 percent to 125 percent of the regional median): 8 percent, up from 1.7 percent last July.
–Higher-priced (125 percent or more than the regional median): 9.8 percent, up from 1.7 percent in July 2020.
John Burns Real Estate Consulting, Irvine, Calif., said the single-family rental industry benefits from a “plethora” of strong fundamentals at the moment, including low new home construction in many markets and extremely tight for-sale housing supply at the entry-level price points where many renters who want to buy a home typically search. In addition, COVID-19 is fueling a desire for extra space from those working from home, which attracts some renters from apartments.
“We believe the single-family rental market will be more cyclical going forward, primarily because the rise of newly built rental subdivisions will create supply of vacant homes,” said Danielle Nguyen, Senior Research Manager with JBREC. “High supply has always contributed to apartment cyclicality, and we believe it will contribute to single-family rental cyclicality too.”