Lack of Inventory Spurring Growth of Single-Family Rental Market

A report by CNBC states that more potential buyers will elect to remain rentals due to the lack of inventory and unaffordable housing market. 

CNBC’s Diana Olick said the stocks of REITs are increasing annually and those companies helping investors buy and sell rental properties are up and seeing “explosive growth.” 

“You can come to us with $5,000 and buy a share of a rental home, all the way up to if you have $500 million and you’re a large institution and want to put that to work,” said Gary Beasley, CEO, Roofstock. 

Olick said Roofstock launched just two years ago and has already surpassed $2 billion in rental property transactions.

CoreLogic reported that single-family rents rose 3.1% year-over-year in October 2019—an increase from 2.9% in October 2018—according to the Single-Family Rent Index. 

Single-family rents started climbing steadily in 2010 and have stabilized at around 3% since early 2019.  

CoreLogic states that rents on lower-priced homes increased 3.6% annually and rentes for higher-priced homes—properties with rents more than 125% of the regional median rent—rose 2.9% year-over-year. 

Rent growth for higher-priced homes gained momentum in October 2019, increased by 0.4% faster than in October 2018. The annual pace of annual rent growth for lower-priced rental homes slowed by 0.2%. 

Phoenix, Arizona, had the highest annual rent growth in October 2019 with an increase of 6.8%, followed by Seattle, Washington (5.8%) and Las Vegas, Nevada (5.4%). Miami, Florida, had the lowest rent growth in October, increasing by just 1% from the prior year. Miami had the lowest rent growth for nine straight months.