from CoreLogic
The Single-Family Rent Index (SFRI) shows a national rent increase of 5.3% year over year, up from a 2.4% year-over-year increase in April 2020.
While rent growth dipped significantly last April at the start of the pandemic, rising affordability issues and supply shortages in the for-sale housing market and ongoing demographic pressure from aging millennials have continued to place upward pressure on the single-family rental market – leading to the largest annual rent price increase in nearly 15 years in April 2021.
As demand for more space and outdoor amenities remains, detached rentals in particular are experiencing accelerated growth with a 7.9% year-over-year increase in April, compared to growth of 2.2% annually for attached rentals. This is reflected in a recent CoreLogic survey, which reported 49% of millennials and 64% of baby boomers strongly prefer to live in a single, stand-alone home. In response, developers are turning to options like build-to-rent communities of luxury single-family rentals that appeal to baby boomers looking to downsize and millennials seeking more space without sacrificing needed flexibility as companies determine remote work policies.
According to Molly Boesel, principal economist at CoreLogic:
Single-family rent growth showed a strong rebound in April 2021 with all price tiers back above their pre-pandemic rent growth rate. While rent growth slowed last April at the start of the pandemic, the rate of rent growth this April was running above pre-pandemic levels even when compared with 2019 and shows no signs of diminishing.
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To gain a detailed view of single-family rental prices, CoreLogic examines 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): 3.9%, up from 3.2% in April 2020
- Lower-middle priced (75% to 100% of the regional median): 4.8%, up from 2.5% in April 2020
- Higher-middle priced (100% to 125% of the regional median): 5.1%, up from 2.3% in April 2020
- Higher-priced (125% or more than the regional median): 6.1%, up from 2.2% in April 2020
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Among the 20 metro areas shown in Table 1, Phoenix had the highest year-over-year increase in single-family rents in April 2021 at 12.2%. Tucson, Arizona, had the second-highest rent price growth with a gain of 10.6%. Atlanta, which had the lowest unemployment rate of the 20 metro areas, had the fourth-highest year-over-year rent growth of 9.1%. Conversely, Boston had an annual decline of 5.9% in rent prices and has experienced the largest decrease in 20 metros’ rent prices for nine consecutive months.
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.
The CoreLogic Single-Family Rent Index analyzes data across four price tiers: Lower-priced, which represent rentals with prices 75% or below the regional median; lower-middle, 75% to 100% of the regional median; higher-middle, 100%-125% of the regional median; and higher-priced, 125% or more above the regional median.
Median rent price data is produced monthly by CoreLogic RentalTrends. RentalTrends is built on a database of more than 11 million rental properties (over 75% of all U.S. individual owned rental properties) and covers all 50 states and 17,500 ZIP codes.
About the CoreLogic Consumer Housing Sentiment Study
3,000+ consumers were surveyed by CoreLogic via Qualtrics. The study is an annual pulse of U.S. housing market dynamics concentrated on consumers looking to purchase a home, consumers not looking to purchase a home, and current mortgage holder. The survey was conducted in April 2021 and hosted on Qualtrics.
The survey has a sampling error of ~3% at the total respondent level with a 95% confidence level.
Source: CoreLogic
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