According to a new study from CoreLogic, single-family home rents climbed 10.2 percent year over year in September, up from 2.6 percent in September of 2020.
Improved job growth and soaring rates in the for-sale housing market contributed to the coronavirus pandemic-fueled demand for single-family rentals.
According to a second CoreLogic report, while 93 percent of consumers consider owning a house a wise investment, competition in the buying market is causing more potential purchasers to stay renters. Individuals prefer more room, and the massive millennial population is approaching marriage and parenthood, so the single-family market is blisteringly hot right now.
Speaking on the report, Molly Boesel, principal economist at CoreLogic, said, “In the third quarter of 2021, single-family rental vacancy rates remained near 25-year lows, pushing annual rent increases into the double digits in September.
“Rent growth should remain strong in the short term, especially as the job market improves and demand for larger houses continues to rise,” says the report.
Rent increase is significant in every price tier, but it is particularly strong at the top:
- Lower-cost homes (those priced at 75% or less than the regional median): 8.3%, up from 2.4 percent in September 2020.
- Lower-middle priced homes (between 75% and 100% of the regional median): 9.3%, up from 2.3 percent in September 2020.
- 10.5 percent, up from 2.4 percent in September 2020, for higher-middle priced properties (100 percent to 125 percent of the regional median).
- Higher-priced (at least 125 percent over the regional median): 11%, up from 2.8 percent in September 2020.
Some marketplaces have a higher level of activity than others. Miami had the most year-over-year rent growth, with a staggering 25.7 percent increase. Miami also boasts one of the country’s highest median rentals. Phoenix and Las Vegas came in second and third, with 19.8% and 15.9%, respectively. As travel resumes following pandemic restrictions, those three markets are enjoying increased growth. The top five markets for rent growth were Austin, Texas, and San Diego.
Chicago, Boston, Philadelphia, Washington, D.C., and the New York City metropolitan region have the lowest rent growth, at less than 5% year over year.