Much like the housing market, the rental sector is showing no signs of a slowdown. According to the most recent CoreLogic numbers, which show that U.S. single-family rents were up 2.9 percent year-over-year in April, among some other noteworthy data points.
Between 2010 and 2018, single-family rents have consistently increased, according to the CoreLogic Single-Family Rental Index (SFRI), which evaluates rent changes among single-family rental homes, including condominiums, utilizing a “repeat-rent analysis” to measure the same rental properties over time.
That said, year-over-year price hikes have moderated since February 2016—when they crested at 4.2 percent—holding steady over the past year with a monthly average of 2.7 percent, the SFRI reports. This April’s 2.9 percent year-over-year increase is a 1.3-percent drop in the growth rate since the 4.2 percent peak, it notes.
Low-end rental homes—properties with rents 75 percent or less of a region’s median rent—buoyed the index’s overall growth in April, SFRI says. Rents on lesser-priced rentals ramped up 4.2 percent year-over-year. On the other hand, rents for higher-priced dwellings—properties with rents exceeding 125 percent of the regional median rent—skipped ahead 2.7 percent year over year, the report shows.
Interestingly, the report found that rent growth increased in the high-end segment but decreased in the low-end segment in April 2018 compared with April 2017. High-end rent growth tracked 1.1 percentage points higher than it did in April 2017, while low-end rent growth was 0.2 percentage points lower than April 2017.
Growth also differed considerably across metropolitan areas. Las Vegas posted the highest year-over-year growth in April, at 5.9 percent, trailed by Phoenix (5.5 percent) and Orlando (5.3 percent). Both cities realized robust year-over-year job growth that month, inking gains of 2.8 percent and 3.2 percent, respectively. This compares with U.S. employment growth of 1.6 percent, SFRI notes. Honolulu was the sole metro among the 20 assessed to display a dip in the rent index, falling 0.3 percent year over year in April.
Rents are still accelerating in such metros as Houston and Miami, which were hammered by hurricanes last year and left with crimped rental inventories, the report says. Houston rents rocketed 4.1 percent year over year this April; Miami rents bounced up by 2.1 percent. Before the 2017 storms hit, rents had been dropping in the two metros.