Single-family rentals (SFR) continued to grow in March, and according to the latest data from CoreLogic’s SFR Index, single-family rents increased 2.9% year over year in March 2019, up from a 2.7% increase in March 2018.
According to CoreLogic, steady rent growth, which began in 2010, have begun to stabilize, fluctuating between 2.7% and 3.1% for the past 12 months. March’s growth was propped up mainly by low-end rentals, defined as properties with rents 75% or less of a region’s median rent. Rents on lower-priced rental homes increased 3.5% year over year and rents for higher-priced homes, defined as properties with rents more than 125% of the regional median rent, increased 2.4% year over year.
CoreLogic notes that by metro area, Phoenix had the highest year-over-year rent growth this March with an increase of 7.4%, followed by Las Vegas (6.9%) and Tucson (6.3%). Meanwhile, Miami had the lowest rent growth in March, increasing by just 0.4% from the prior year, and Houston and Miami had the largest deceleration in rent growth in March.
Despite the stabilized price growth, new single-family rent construction slipped in March, according to the latest data from the National Association of Homebuilders (NAHB) and the Census Bureau.
The Census Bureau’s Quarterly Starts and Completions by Purpose and Design report indicates that there were 5,000 single-family built-for-rent starts for the first quarter of 2019, below the 6,000 estimated for the start of 2018. Over the last four quarters, 42,000 such homes began construction.
The NAHB notes that these quarter-to-quarter fluctuations were not statistically significant. The current four-quarter moving average of market share (4.8%) remains higher than the recent historical average of 2.7% (1992-2012) but is down from the 5.8% reading registered at the start of 2013.
Though built-for-rent single-family rentals have been on the decline, the overall single-family rental market has been on the rise. The market for single-family rental (SFR) securitizations continued to grow month over month. It increased to 4.7% in March from 4.2%, according to the latest Morningstar Credit Ratings report on the SFR market.