CoreLogic’s latest Single-Family Rent Index (SFRI), which analyzes single-family rent price changes nationally and across major metropolitan areas, has found that in February 2021, there was a national rent increase of 3.9% year-over-year, up from a 3% year-over-year increase in February 2020.
“While single-family rent increases overall were above the pre-pandemic rate in February, renters are not experiencing recovery the same across the board,” said Molly Boesel, principal economist at CoreLogic. “As vaccine eligibility opens up more widely and businesses continue to open their doors in response, we may see a balance of recovery.”
As families continue to seek out more space and face housing affordability concerns, high demand and low rental supply inventory has led to rising rental prices nationwide.
According to CoreLogic, after growing approximately 3% annually since mid-2018, rent growth slowed in the spring of 2020, but bounced back in three of the four tiers to exceed the pre-pandemic growth rate beginning in October 2020.
However, rent price growth of the low-price tier continues to trail high-priced rentals, resulting in uneven U.S. job recovery, often referred to as a “K-shaped recovery.” Rent growth in the low-price tier remains below pre-pandemic levels, as the recession continues to disproportionately affect lower-wage workers.
For the analysis, 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): 2.9%, down from 3.7% in February 2020
- Lower-middle priced (75% to 100% of the regional median): 3.4%, up from 3.1% in February 2020
- Higher-middle priced (100% to 125% of the regional median): 3.9%, up from 2.8% in February 2020
- Higher-priced (125% or more than the regional median): 4.4%, up from 2.7% in February 2020
Regionally, Tucson, Arizona had the highest year-over-year increase in single-family rents in February 2021 at 11.2%. Phoenix had the second-highest rent price growth with a gain of 11.1%, followed by Atlanta at 8.1%. Conversely, Boston had an annual decline of 8.9% in rent prices and experienced the largest decrease in all analyzed metros’ rent prices for seven consecutive months. Chicago also posted an annual rent decrease of 2.9% in February 2021 year-over-year. Rent prices of detached rentals in Chicago increased by 4.2% in February 2021, while attached rentals decreased by 4.8%, demonstrating a demand to gain more living space.
Delving deeper into the SFR market, on Wednesday, May 12, the Five Star Institute will present its 2021 Single-Family Rental Summit (SFRS) at The Four Seasons Resort and Club Dallas at Las Colinas. The in-person event brings together top subject matter experts and skilled SFR practitioners who will lead discussion panels and training sessions that will answer questions and offer viable solutions related to property acquisition and management, financing, strategies for small, midcap, and large investors, and new developments related to technology and professional services.
More information about the agenda, registration, and other event details are available here.