US Single-Family Rents Up 2.8 Percent Year Over Year in February

Las Vegas Had the Highest Year-Over-Year Rent Growth in February

By Molly Boesel Housing Affordability, Property Rental

  • High-end segment rent growth accelerated in February 2018 compared with February 2017
  • Of 20 metros analyzed, only Honolulu experienced a year-over-year decrease in single-family rents in February

Single-family rents climbed steadily between 2010 and 2018, as measured by the CoreLogic Single-Family Rental Index (SFRI). However, the index shows year-over-year rent growth has decelerated slowly (Figure 1) since it peaked early last year. In February 2018, single-family rents increased 2.8 percent year over year, a 1.4-percentage-point decline since the growth rate hit a high of 4.2 percent in February 2016. The index measures rent changes among single-family rental homes, including condominiums, using a repeat-rent analysis to measure the same rental properties over time.

National Single Family Rent Index Year over Year

Using the index to analyze specific price tiers reveals important differences. Figure 1 shows that the index’s overall growth in February 2018 was pulled down by the high-end rental market, defined as properties with rents 125 percent or more of a region’s median rent. Rents on higher-priced rental homes increased 2.4 percent year over year and rents on lower-priced homes, defined as properties with rents less than 75 percent of the regional median rent, increased 3.7 percent year over year. However, rent increases are accelerating for the high end and decelerating for the low end. High-end rent growth was 0.9 percentage points higher than February 2017, and low-end rent growth was 0.8 percentage points lower than February 2017.

Rent growth varies significantly across metro areas[1]. Figure 2 shows the year-over-year change in the rental index for 20 large metro areas in February 2018. Las Vegas had the highest year-over-year rent growth in February with an increase of 5.3 percent, followed by Orlando (+4.8 percent) and Phoenix (+4.4 percent). Both Orlando and Phoenix had strong job growth in February compared with the prior year, with job gains of 3.7 percent and 3.1 percent respectively. This is compared with national employment growth of 1.4 percent. Honolulu was the only metro among the 20 analyzed to show a decrease in the rent index, declining  0.5 percent year over year in February. Rents continue to increase in disaster areas like the Houston and Miami metro areas. Houston rents were up 2.7 percent year over year and Miami was up 1.5 percent year over year. Prior to the 2017 late-summer hurricanes, rents had been decreasing in these metro areas.

[1] Metro areas used in this report are Core Based Statistical Areas. The SFRI is computed for 75 CBSAs.

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