CoreLogic did not have much good news to report for the month of May 2022 as single-family rent growth remained at a record high during the month, posting a 13.9% year-over-year increase. These sustained high rent prices are in part due to a “robust” labor market as the national unemployment rate hit 3.6%, down by 2.2 percentage points on an annual basis and was the lowest rate recorded since the onset of the pandemic.
Additionally, affordability issues became more prevalent as rising interest rates are pricing-out prospective homebuyers thus giving landlords a larger pool of potential tenants and thus the leverage to continue raising prices. The year-over-year single-family rent price growth was more than twice as much as in May 2021 and eight times higher than it was in May 2020.
“Increases in mortgage rates and high home prices can be headwinds to the for-sale housing market but may be continually pushing up single-family rents,” said Molly Boesel, Principal Economist at CoreLogic. “While the annual increase in the SFRI for May matched April’s growth rate, the gain remains at a record-high level. Furthermore, the month-over-month growth rate for rents in May was well above that month’s 19-year average.”
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): 14.3%, up from 4.7% in May 2021
- Lower-middle priced (75% to 100% of the regional median): 14.6%, up from 5.4% in May 2021
- Higher-middle priced (100% to 125% of the regional median): 14.7%, up from 5.8% in May 2021
- Higher-priced (125% or more than the regional median): 13.2%, up from 8.2% in May 2021
In the top 20 metropolitan areas, Miami posted the highest year-over-year increase in single-family rents in May 2022 at 39.5%, topping the list for the tenth consecutive month. This was followed by Orlando, Florida (24.8%) and Las Vegas (16.7%), while the lowest posted gains were in St. Louis (7.9%) and Honolulu (7%).
Another interesting tidbit found by CoreLogic is that while a standard detached rental property appreciated at a rate of 13.6%, attached rental property prices grew by 13.4%, a modest gain in itself, but when looking at how much it has increased over the last two years, that number grows to a rate of 24.4%.
For ongoing housing trends and data, visit the CoreLogic Intelligence Blog here.