from CoreLogic
The Single-Family Rent Index (SFRI), which analyzes single-family rent price changes nationally and among 20 metropolitan areas shows a national rent increase of 3% year over year, unchanged from November 2018.
Low rental home inventory, relative to demand, fuels the growth of single-family rent prices. The SFRI shows 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 4.2%, and have stabilized at around 3% since early 2019.
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November marked the 67th consecutive month in which low-end rentals propped up national rent growth. Rent prices among this tier, defined as properties with rent prices less than 75% of the regional median, increased 3.6% year over year in November 2019, down from a gain of 3.8% in November 2018. Meanwhile, high-end rentals, defined as properties with rent prices greater than 125% of a region’s median rent, increased 2.7% in November 2019, unchanged from November 2018.
Among the 20 metro areas shown in Table 1, and for the 12th consecutive month, Phoenix had the highest year-over-year increase in single-family rents in November 2019 at 6.9% (compared to November 2018). Tucson, Arizona experienced the second-highest rent price growth in November 2019 with gains of 5.7%, followed closely by Seattle at 5.4%. Miami experienced the lowest rent increases out of all analyzed metros at 0.7%.
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Metro areas with limited new construction, low rental vacancies and strong local economies that attract new employees tend to have stronger rent growth. Phoenix and Seattle experienced high year-over-year rent growth in November, driven by the annual employment growth of 2.6% and 2.9%, respectively. This is compared with the national employment growth average of 1.5%, according to data from the United States Bureau of Labor Statistics.
Said Molly Boesel, principal economist at CoreLogic:
Strong rent growth in the Southwest reflects strong population growth in this part of the U.S.. Arizona ranked third for population growth in 2019 by both number and percentage increase, according to the U.S. Census Bureau. In contrast, Illinois and Hawaii both had a decrease in population in 2019, which could account for the slower rent growth in these regions.
Methodology
The single-family rental market accounts for half of the rental housing stock, yet unlike the multifamily market, which has many different sources of rent data, there are minimal quality-adjusted single-family rent transaction data. The CoreLogic Single-Family Rent Index (SFRI) serves to fill that void by applying a repeat pairing methodology to single-family rental listing data in the Multiple Listing Service. CoreLogic constructed the SFRI for over 80 metropolitan areas —including 45 metros with four value tiers—and a national composite index.
About the CoreLogic Consumer Housing Sentiment Study
In the second quarter of 2019, 877 renters and homeowners were surveyed by CoreLogic together with RTi Research. This study is a quarterly pulse of U.S. housing market dynamics. Each quarter, the research focuses on a different issue related to current housing topics. This first quarterly study concentrated on consumer sentiment within high-priced markets. The survey has a sampling error of +/- 3.1% at the total respondent level with a 95% confidence level.
About RTi Research
RTi Research is an innovative, global market research and brand strategy consultancy headquartered in Norwalk, CT. Founded in 1979, RTi has been consistently recognized by the American Marketing Association as one of the top 50 U.S. insights companies. The company serves a broad base of leading firms in Financial Services, Consumer Goods, and Pharmaceuticals as well as partnering with leading academic centers of excellence.
Source: CoreLogic
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About CoreLogic
CoreLogic (NYSE: CLGX), the leading provider of property insights and solutions, promotes a healthy housing market and thriving communities. Through its enhanced property data solutions, services and technologies, CoreLogic enable real estate professionals, financial institutions, insurance carriers, government agencies, and other housing market participants to help millions of people find, acquire and protect their homes. For more information, please visit www.corelogic.com.
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