Overall rent growth stayed a steady course in November, according to a look at the month's rent increases by CoreLogic. The national rate of rental price increases was 2.9 percent, just barely up from 2.8 percent in November 2017, CoreLogic's Single Family Rent Index revealed.
Properties with rent prices less than 75 percent of the regional median saw the biggest jump in prices. In November, rents on these properties were up 3.8 percent year from the year before, even though that rate is slightly down from November 2017's rate of 3.9 percent.
On the other end of the spectrum, properties with rent prices greater than 125 percent of a region’s median rent increased 2.6 percent in November 2018. That's up from 2.3 percent in November 2017.
Molly Boesel, Principal Economist at CoreLogic, noted the difference between what rents have been doing and where home prices are heading.
“Unlike the CoreLogic Home Price Index, which has seen a slowdown in growth over the past year, U.S. rent growth has remained stable,” Boesel said. “However, long-term rent increases have been lower than long-term home price increases.”
Rent prices increased 17 percent over the past five years. Compare that to the 32 percent increase in home prices over the same period. Lower-priced rentals and homes increase 1.5 to 2 times faster than higher-priced rentals and homes, according to CoreLogic.
“These lopsided gains between price tiers are common,” Boesel said.
All that said, year-over-year rent price increases have slowed since February 2016, when they peaked at 4.2 percent and stabilized at just shy of 3 percent in 2018.
Las Vegas had the highest year-over-year increase in single-family rents in November—6.7 percent. Phoenix came in a close second at 6.1 percent and Orlando saw rents tick up 5.3 percent. Both Orlando and Phoenix experienced high year-over-year rent growth in November 2018, driven by employment growth of 4.8 percent and 4.2 percent year over year, respectively.
Seattle, one of the most expensive and escalating housing markets over the past few years, actually saw rents drop by 0.7 percent in November. It was the only metro to see a drop and it was Seattle's first month of decrease in rent since 2010.
Rent prices in disaster-affected areas like Houston grew throughout 2018, but growth in Houston stalled at 1 percent in November. That's down from 2.4 percent a year earlier and it's the lowest year-over-year rent price increase for Houston in two years.