CoreLogic: Single-Family Rent Growth Remains Stable as Employment Growth Strengthens
MBA NewsLink Staff
CoreLogic, Irvine, Calif., reported U.S. single-family rent prices increased 3% year over year in May, with low-end rent prices up 3.5%, compared to high-end price gains of 2.5%.
The company's monthly Single-Family Rent Index low rental home inventory, relative to demand, fueled growth of single-family rent prices. The Index showed single-family rent prices have climbed between 2010 and 2019. However, overall year-over-year rent price increases have slowed since February 2016, when they peaked at 4.1%, and have stabilized over the past year with a monthly average of 3%.
The report said national rent growth continued to be propped up by low-end rentals in May. Rent prices among this tier, defined as properties with rent prices less than 75% of the regional median, increased 3.5% year over year in May, down from a gain of 3.9% a year ago. Meanwhile, high-end rentals, defined as properties with rent prices greater than 125% of a region's median rent, increased 2.5% in May, up slightly from 2.4% a year ago.
Among the 20 metro areas surveyed, CoreLogic said Phoenix had the highest year-over-year increase in single-family rents in May at 7.4%, followed by Tucson, Ariz. at 6.3% and Las Vegas at 6.1%. Miami and Houston tied for the lowest rent increases of all analyzed metros at 1%, marking the lowest year-over-year rent increase in Houston since October 2017 (0.8%), which CoreLogic said can likely be attributed to waning effects of the 2017 hurricane season.
"Metro areas with limited new construction, low rental vacancies and strong local economies that attract new employees tend to have stronger rent growth," the report said.