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Investors See Record SFR Appreciation

non-owner-occupiedSingle-family rents grew by an average of 3% in 2019, driven in part by the lowest unemployment rate in over 50 years, according to the CoreLogic Single-Family Rent Index (SFRI), a measure of rent changes among single-family rental homes, including condominiums.

“Strong economic growth and the lowest unemployment rate in over 50 years helped push single-family rents up by an average of 3% in 2019, which was the fastest rent appreciation since 2016,” CoreLogic said.

According to the Index, rents on lower-priced rental homes increased 3.4% year over year and rents for higher-priced homes, defined as properties with rents more than 125% of the regional median rent, increased 2.5% year over year. Rents for lower-priced homes have been growing faster than for higher-priced homes since May 2014, though the difference in these two growth rates has narrowed over time.

The index’s overall growth in December 2019 was propped up by low-end rentals, defined as properties with rents 75% or less of a region’s median rent. Rents on lower-priced rental homes increased 3.4% year over year and rents for higher-priced homes, defined as properties with rents more than 125% of the regional median rent, increased 2.5% year over year. Rents for lower-priced homes have been growing faster than for higher-priced homes since May 2014, though the difference in these two growth rates has narrowed over time.

Phoenix had the highest year-over-year rent growth this December as it has since December 2018, with an increase of 6.7%, followed by Tucson (+5.7%) and Las Vegas (+5.1%). Honolulu had the lowest rent growth in December, increasing by 0.4% from the prior year. Orlando had the largest deceleration in rent growth in December, showing annual rent growth of 2.9 percentage points lower than in December 2018. Boston had the largest acceleration in rent growth in December, with rents increasing 2.4 percentage points faster than in December 2018.

About Author: Seth Welborn

Seth Welborn is a Reporter for DS News and MReport. A graduate of Harding University, he has covered numerous topics across the real estate and default servicing industries. Additionally, he has written B2B marketing copy for Dallas-based companies such as AT&T. An East Texas Native, he also works part-time as a photographer.
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