CoreLogic [1] has released its latest Single-Family Rent Index [2] (SFRI), which analyzes single-family rent price changes nationally and across major metropolitan areas.
U.S. single-family rent growth continued its hot streak in April, with prices up by 14% year-over-year, the 13th consecutive month of record-breaking annual gains. As in past months, a shortage of rental properties on the market is putting pressure on prices, as is a thriving job market, with the nation’s economy adding nearly 430,000 new positions in April, [3] and an annual wage increase of 5.5%.
The year-over-year U.S. rent price growth once again was more than double the April 2021 increase and more than six times higher than the April 2020 growth. Rental cost gains slowed in early 2020 due to the uncertainty surrounding the pandemic, but rebounded by autumn of that year to surpass the pre-pandemic rate.
“Single-family rents continue to increase at record-level rates,” said Molly Boesel, Principal Economist at CoreLogic. “In April, rent growth provided upward pressure on inflation, which rose at rates not seen in nearly 40 years. We expect single-family rent growth to continue to increase at a rapid pace throughout 2022.”
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): 13.7%, up from 4% in April 2021
- Lower-middle priced (75% to 100% of the regional median): 14.4%, up from 4.4% in April 2021
- Higher-middle priced (100% to 125% of the regional median): 14.6%, up from 4.6% in April 2021
- Higher-priced (125% or more than the regional median): 13.5%, up from 6.4% in April 2021
Of the 20 metro areas polled, Miami posted the highest year-over-year increase in single-family rents in April 2022 at 40.8%, about seven times its April 2021 annual growth rate of 5.6%. Orlando, Florida and Phoenix recorded the second- and third-highest gains at 25.8% and 17.8%.
Philadelphia (7.8%) and Honolulu (7.7%) posted the lowest annual rent price growth. Phoenix’s April 2.7% unemployment rate is likely helping drive demand and rental cost gains, while Philadelphia’s 6.2% unemployment rate could be causing more tenants to stay put to avoid incurring additional expenses.
Differences in rent growth by property type emerged after COVID-19 took hold, as renters sought standalone properties in lower-density areas. This trend drove an uptick in rent growth for detached rentals in 2021, while the gains for attached rentals was more moderate.
However, as rental inventory remains slim, the gap between attached and detached rental growth started to close last fall. In April 2022, attached rental property prices grew by 13.7% year over year, compared to the 13.5% increase for detached homes.
The next CoreLogic Single-Family Rent Index will be released on July 19, 2022, featuring data for May 2022. For ongoing housing trends and data, visit the CoreLogic Intelligence Blog here [4].