Rent Growth Stays Strong

US Single-Family Rents Up 3 Percent Year Over Year in October

By Molly Boesel Housing Affordability, Property Rental

  • High-end segment rent growth accelerated and low-end segment decelerated in October 2018 compared with October 2017.
  • Seattle had the lowest rent growth in October.

Single-family rents increased 3 percent year over year in October 2018, up from a 2.7 percent increase in October 2017, according to the CoreLogic Single-Family Rental Index (SFRI). 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. Single-family rents climbed steadily between 2010 and 2018. The increase in rents has ticked up in recent months, inching above a 3 percent year-over-year gain starting this June.

Using the index to analyze specific price tiers reveals important differences. Figure 1 shows that the index’s overall growth in October 2018 was propped up by 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 3.9 percent year over year and rents for higher-priced homes, defined as properties with rents more than 125 percent of the regional median rent, increased 2.6 percent year over year. However, rent growth is accelerating for the high end and decelerating for the low end. High-end rent growth was 0.6 percentage points higher and low-end rent growth was 0.3 percentage points lower than in October 2017.

National Single-Family Rent Index

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 October 2018. Las Vegas had the highest year-over-year rent growth this October with an increase of 6.6 percent, followed by Phoenix  (+6.4 percent) and Orlando (+5.3 percent). Orlando had the strongest year-over-year employment growth among the 20 metros in October, with job gains of 4.4 percent. This is compared with national employment growth of 1.7 percent. Seattle had the lowest year-over-year rent growth, increasing by just 0.3 percent. None of the 20 metro areas had annual rent declines in October 2018. While the growth rate in the national index accelerated by only 0.3 percentage points, some metro areas are showing significant acceleration or deceleration compared with a year ago. Austin had the greatest acceleration in rent growth, increasing 3.2 percentage points faster than in October 2017. Seattle’s rent growth decelerated the most, easing by 3.5 percentage points. 

Single-Family Rent Index

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

© 2018 CoreLogic, Inc. All rights reserved.