CoreLogic has released its latest Single-Family Rent Index (SFRI), analyzing single-family rent price changes nationally and across major metropolitan areas, which found that in August 2021, there was a national rent increase of 9.3% year-over-year, up from a 2.2% year-over-year increase in August 2020.
CoreLogic’s SFRI hit a milestone in August, with all major metros covered showing positive rent growth for the first time since April 2020.
“Converging economic trends are driving a surge in single-family rent prices, and consumer confidence has driven an uptick in demand for both renters and buyers,” said Molly Boesel, Principal Economist at CoreLogic. “Meanwhile, consumers continue to relocate as they return to in-person work and school. The ongoing preference toward more living space—and slim for-sale inventory—is forcing would-be buyers back into renting, putting significant strain on the single-family rental market.”
CoreLogic examined four tiers of rental prices:
- Lower-priced (75% or less than the regional median):1%, up from 2.4% in August 2020
- Lower-middle priced (75% to 100% of the regional median):1%, up from 2% in August 2020
- Higher-middle priced (100% to 125% of the regional median):2%, up from 2% in August 2020
- Higher-priced (125% or more than the regional median):5%, up from 2.3% in August 2020
A recent analysis by Redfin found that rent price increases surpassed mortgage payments for new homebuyers in 26 of the 50 largest metro areas in the U.S. during September. The metro areas experiencing the largest increases in rent prices were clustered in southern Florida where people have been flocking to escape more expensive metros in the northeast, as rents were up the most from a year earlier in Fort Lauderdale, Miami, and West Palm Beach, which all saw rents go up 36%.
"Florida is seeing some of the largest increases in rents thanks to migration from remote workers who previously lived in cities like New York or San Francisco," said Redfin Chief Economist Daryl Fairweather. "Because out-of-towners typically rent before buying, this migration is likely driving a larger spike in demand for rentals compared to homes for sale. Florida also has some of the highest climate risks in the country from sea-level rise, storms, and heat. So, renting may be particularly attractive to residents who don't want to make a long-term bet on the Florida housing market."
As unemployment continues to steadily decline, air travel picks back up, and tourism re-gains traction, rental markets in popular tourist destinations showed strong signs of recovery in August.
According to CoreLogic, Miami, Florida had the highest year-over-year increase in single-family rents in August 2021 at 21.4%. This is the first time in 32 months that Phoenix, Arizona did not claim the top spot, and instead, logged the second-highest rent price growth with a gain of 19.2%, followed by Las Vegas, Nevada’s gain of 15.4%. And after 14 months of declining rent prices, Boston logged its first annual increase, as renters return to the metro for in-person work and school.
Click here for more on CoreLogic’s Single-Family Rent Index (SFRI).