Single-family rents rose 1.7% annually in May 2020—the lowest growth rate since July 2010—according to CoreLogic’s Single-Family Rent Index (SFRI).
CoreLogic noted rental demand is still impacted by unemployment rates and stay-at-home orders, despite local economics reopening.
Lower-priced rentals continued to prop up national rent price growth, continuing a trend from April 2014. Year-over-year growth in both tiers did slow in May 2020. Rent prices in the low-end tier—those with rent prices less than 75% of the regional average—rose 2.8% annually in May 2020.
This represented a 3.5% drop from May 2019. However, higher-priced rentals, which are those with prices more than 125% of the regions’ average rent, rose 1.3% in May 2020—down from a gain of 2.5% in May 2019.
Among the 20 metros studied by CoreLogic, Phoenix had the highest year-over-year growth in May with an increase of 6%. Neighboring Arizona city, Tucson, saw rent prices rise 3.5%, which was followed by Charlotte, North Carolina’s, 2.9% growth.
Honolulu was the only metro to experience an annual decline in rent prices, falling 0.4%. St. Louis had the largest deceleration in rent growth in May, with a reported slowdown of 3.8 percentage points from May 2019.
CoreLogic stated that U.S. unemployment remains elevated in May. Some areas of the nation are continuing to experience higher rates of job loss, which impacts rental demand and price growth.
Detroit reported a 19.9% decline in employment, causing rent price growth to remain stagnant in May 2020.
“Meanwhile, Phoenix’s employment declines were relatively minimal in May, where rent growth remained strong. As regions like Florida, Texas, and Arizona grapple with a resurgence of COVID-19 cases, we may expect to see a more significant impact to rent prices on the local level,” the report states.
The U.S. Department of Labor reported earlier this month that initial unemployment claims came in a 1.3 million for the week ending July 4. This is a decline of 99,000 from the week prior
The prior week’s level was revised down by 14,000 to 1.41 million from 1.42 million. The four-week moving average was 1.43 million—a decline of 63,000 from the previous week’s revised average.