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Single-Family Rental Market Stabilizes

According to the latest data from CoreLogic’s Single-Family Rental Index [1], single-family rents increased 2.9% year-over-year in March 2019, up from a 2.7% increase in March 2018.

CoreLogic reports that the steady rent growth that began in 2010 has begun to stabilize, fluctuating between 2.7% and 3.1% for the past 12 months. March’s growth was propped up mainly 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 3.5% year-over-year and rents for higher-priced homes, defined as properties with rents more than 125% of the regional median rent, increased 2.4% year-over-year.

CoreLogic notes that, by metro area, Phoenix had the highest year-over-year rent growth this March, with an increase of 7.4%. It was followed by Las Vegas (6.9%) and Tucson, Arizona (6.3%). Meanwhile, Miami had the lowest rent growth in March, increasing by just 0.4% from the prior year, and Houston and Miami had the largest deceleration in rent growth in March.

Data [2] from the National Association of Homebuilders (NAHB) and the Census Bureau revealed that new single-family rent construction slipped in March. The Census Bureau’s Quarterly Starts and Completions by Purpose and Design report indicates that there were 5,000 single-family built-for-rent starts for Q1 2019, below the 6,000 estimated for the start of 2018. Over the last four quarters, 42,000 such homes began construction.

The NAHB notes that these quarter-to-quarter fluctuations were not statistically significant. The current four-quarter moving average of market share (4.8%) remains higher than the recent historical average of 2.7% (1992-2012) but is down from the 5.8% reading registered at the start of 2013.

The market for single-family rental (SFR) securitizations [3], meanwhile, continued to grow month-over-month in March. During that month, it increased to 4.7% from 4.2%, according to a recent Morningstar Credit Ratings report.