U.S. single-family rent price growth continued at a record pace in March, up 13.6% from one year earlier, according to CoreLogic’s latest Single-Family Rent Index (SFRI), released this week.
Slim inventory continues to squeeze renters, as do robust home price gains—both familiar culprits in declining affordability. As in months past, warmer areas of the country continued to experience the highest rental cost growth, with prices in two large Florida metro areas accelerating at about two-to-three times the national rate, according to the report.
The year-over-year U.S. rent price growth once again more than tripled the gain recorded in March 2021 and more than quadrupled the increase from March 2020. Rent price appreciation slowed in early 2020 due to the uncertainty surrounding the coronavirus (COVID-19) pandemic but rebounded by autumn of that year to surpass its pre-pandemic rate.
“A shortage of single-family properties available for rent has plagued the market, pushing rents up at record-level rates,” said Molly Boesel, principal economist at CoreLogic. “The number of single-family rental properties listed in early 2022 was well below pre-pandemic levels and still shrinking from one year ago.”
To gain a detailed view of single-family rental prices, CoreLogic examined 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): 12.4%, up from 3.3% in March 2021
- Lower-middle priced (75% to 100% of the regional median): 14.1%, up from 3.5% in March 2021
- Higher-middle priced (100% to 125% of the regional median): 14.6%, up from 3.8% in March 2021
- Higher-priced (125% or more than the regional median): 13%, up from 5.3% in March 2021
Differences in rent growth by property type emerged after COVID-19 took hold, as renters sought standalone properties in lower-density areas, CoreLogic reports. 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 March of 2022, attached rental property prices grew by 13.2% year over year, compared to the 13.3% increase recorded for detached homes.
