Another month, another record set. According to CoreLogic rent prices for single-family homes continued their double-digit gains in February as prices rose 13.1% from one year earlier on a national scale.
But prices did not increase the same everywhere. According to CoreLogic’s Single-Family Rental Index, rents in warmer, coastal areas such as Miami went up 39.5% over what they were in February 2021.
This record-breaking increase has mainly been fueled by a shortage of available rental units, a low national unemployment rate, and “robust” home prices increases which themselves have increased 20%. The high cost of housing is likely also contributing for people’s desires to rent over buy, further increasing rental demand.
“Single-family rents rose at more than three times the rate from a year earlier and more than four times the pre-pandemic rate,” said Molly Boesel, principal economist at CoreLogic. “Strong employment and low supply have pushed single-family rental vacancy rates to low levels and have contributed to the high growth in rents.”
To gain a detailed view of single-family rental prices, CoreLogic examines four tiers of rental prices. National single-family rent growth across the four tiers, and the year-over-year changes, were as follows:
- Lower-priced (75% or less than the regional median): 12.7%, up from 3% in February 2021
- Lower-middle priced (75% to 100% of the regional median): 13.8%, up from 3.2% in February 2021
- Higher-middle priced (100% to 125% of the regional median): 13.9%, up from 3.6% in February 2021
- Higher-priced (125% or more than the regional median): 12.8%, up from 4.6% in February 2021
“Differences in rent growth by property type emerged after the pandemic, as renters desired standalone properties in lower-density areas,” the report said. “This trend drove an uptick in rent growth for detached rentals in 2021, while the gains for attached rentals was more moderate.”
“However, as rental inventory remains slim, the gap between attached and detached rental growth started to close last fall. In February of 2022, attached rental property prices grew by 12.9% year over year, compared to the 12.8% increase recorded for detached homes. This is the closest that attached and detached growth rates have been since December 2019.”
Single-family rentals account for about half of the rental housing stock. CoreLogic constructs data for the SFRI by analyzing 100 metropolitan markets through RentalTrends, a subsidy of CoreLogic, built on a database of 11 million rental properties in all 50 states and 17,500 zip codes.