CoreLogic released its latest Single-Family Rent Index (SFRI), which analyzes single-family rent price changes nationally and across major metropolitan areas. Single-family rent prices experienced extensive growth during 2021, increasing an average of 7.8% compared to 2.6% in 2020. But the data shows that prices have continued to climb in 2022 as single-family rents have increased 12.6% year over year in January, reaching another “historic” high.
The 12.6% increase pales in comparison from the 3.9% increase seen between January 2020 and January 2021. This is triple the gain recorded in January 2021 and quadruple the gains from January 2020.
According to the report, all major metropolitan areas monitored by the report saw year over year increases with the Sun Belt states registering the highest growth.
In addition, the cost of purchasing a home rose by 19% year over year in January, a price increase steep enough to shut out many would-be buyers, keeping them in the rental market.
“Single-family rent growth extended its record-breaking price growth streak to 10 consecutive months in January,” said Molly Boesel, principal economist at CoreLogic. “Rents increased across the country, and the gains were highest in the Sun Belt, which also had strong population growth last year.”
To gain a detailed view of single-family rental prices, CoreLogic examined 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): 12%, up from 3% in January 2021
- Lower-middle priced (75% to 100% of the regional median): 13.3%, up from 3.2% in January 2021
- Higher-middle priced (100% to 125% of the regional median): 13.4%, up from 3.6% in January 2021
- Higher-priced (125% or more than the regional median): 12.2%, up from 4.5% in January 2021
Among cities, Miami saw the highest growth with single-family rents increasing at a rate of 38.6% over the course of the year, a significant increase from the 2.2% seen in the prior year. Orlando and Phoenix saw the next highest gains at 19.9% and 18.9%, respectively, following population gains seen in these areas.
Washington D.C. clocked the slowest rent price growth of major metropolitan cities, coming in at a 5.6% increase.
“Differences in rent growth by property type emerged after the pandemic, as renters sought out standalone properties in lower-density areas,” the report concluded. “This trend drove an acceleration 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 January of 2022, attached rental property prices grew by 12.2% year over year, compared to the 12.4% increase recorded for detached homes. This is the closest that attached and detached growth rates have been since March 2020.”