U.S. rent prices continued their double-digit gains in February, rising 13.1% from one year earlier to hit another new record as the highest in the history of the index, according to CoreLogic’s latest Single-Family Rent Index (SFRI), which analyzes single-family rent price changes nationally and across major metropolitan areas.
According to the report, warmer areas of the country again posted the largest price hikes, with rents in Miami up 39.5% from February 2021. A shortage of available rentals has contributed to the prolonged run-up in price growth, as has the low U.S. unemployment rate, which dropped to 3.8% in February. Also, robust home price increases, up 20% year over year in February, are likely contributing to more Americans renting rather than buying.
Key findings:
- Nationwide, single-family rent prices were up 13.1% year over year in February, the 11thstraight month of record-level gains
- The gap in growth between the lowest- and highest-priced rental tiers closed in February, with respective annual gains of 12.7% and 12.8%
- Rent increases varied slightly by price-point:
- 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
The takeaway:
Rent increases were steepest along the sunbelt region. In addition to Miami’s staggering spike of 39.5%, “Orlando and Phoenix logged the second- and third-highest gains at 22.2% and 18.9% respectively…Meanwhile, the Washington D.C. area and St. Louis recorded the lowest annual rent price growth, both at 6.5%,” according to the report.
Prices for detached rentals grew faster than attached rentals in the wake of the pandemic, as stand-alone properties in low-density areas were more desirable. However, in the last year attached rental property prices grew by 12.9%, compared to the 12.8% increase recorded for detached homes. The report notes, “This is the closest that attached and detached growth rates have been since December 2019.”
“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 read the full report, click here.
