US Single-Family Rents Up 2.9 Percent Year Over Year in April

Rent Increases Driven by Employment Growth

By Molly Boesel Housing Affordability, Property Rental

  • While low-end rents are still increasing faster than high-end rents, high-end segment rent growth accelerated and low-end segment decelerated in April 2018 compared with April 2017.
  • Metros in the southwest region showed the highest rent increases over the past year.

Single-family rents climbed steadily between 2010 and 2018, as measured by the CoreLogic Single-Family Rental Index (SFRI). However, year-over-year rent price increases have slowed since February 2016, when they peaked at 4.2 percent, and have stabilized over the last year with a monthly average of 2.7 percent.  In April 2018, single-family rents increased 2.9 percent year over year, a 1.3-percentage-point decline in the growth rate since it hit a high of 4.2 percent in February 2016. The SFRI index measures rent changes among single-family rental homes, including condominiums, using a repeat-rent analysis to measure the same rental properties over time.

Using the index to analyze specific price tiers reveals important differences. Figure 1 shows that the index’s overall growth in April 2018 was propped up by the low-end rentals, defined as properties with rents 75 percent or less of a region’s median rent. Rents on lower-priced rental homes increased 4.2 percent year over year and rents in the higher-priced homes, defined as properties with rents more than 125 percent of the regional median rent, increased 2.7 percent year over year. However, rent growth is accelerating for the high end and decelerating for the low end. High-end rent growth was 1.1 percentage points higher than in April 2017, and low-end rent growth was 0.2 percentage points lower than April 2017.

National Single-Family Rent Index Year-Over-Year Percent Change by Price Tier

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 April 2018. Las Vegas had the highest year-over-year rent growth in April with an increase of 5.9 percent, followed by Phoenix (+5.5 percent) and Orlando (+5.3 percent). Both Phoenix and Orlando had strong year-over-year job growth in April, with job gains of 2.8 percent and 3.2 percent respectively. This is compared with national employment growth of 1.6 percent. Honolulu was the only metro among the 20 analyzed to show a decrease in the rent index, declining 0.3 percent year over year in April. Rents continue to increase in metro areas such as Houston and Miami that were hit by hurricanes last year and left with tighter rental supplies. Houston rents rose 4.1 percent year over year in April 2018 and Miami rents increased 2.1 percent. Prior to the 2017 late-summer hurricanes, rents had been decreasing in those two metro areas.

Single-Family Rent Index Year Over Year Percent Change in 20 Markets

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

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