Annual Rent Gains for Low-Priced Rental Homes Decelerate But Remain Above Those for High-Cost Rental Homes

US Single-Family Rents Up 2.9% Year Over Year in July

By Molly Boesel Housing Affordability, Property Rental

  • Rents for lower-priced homes increased faster than those of higher-priced homes in July compared with a year earlier.
  • Phoenix once again outpaced many other large metros for annual rent increases.
  • San Diego and Orlando had the largest deceleration in annual rent growth.

U.S. single-family rents increased 2.9% year over year in July 2019, down from a 3.1% increase in July 2018, according to the CoreLogic Single-Family Rent 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 started climbing steadily in 2010, and during the past 12 months annual rent increases have stabilized, fluctuating between 2.9% and 3.2%.

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

Using the rent index to analyze specific price tiers reveals important differences. Figure 1 shows that the index’s overall growth in July 2019 was propped up by low-end rentals, defined as properties with rents 75% or less of a region’s median rent. Rents on lower-priced rental homes increased 3.5% year over year and rents for higher-priced homes, defined as properties with rents more than 125% of the regional median rent, increased 2.7% year over year. The pace of annual rent growth for lower-priced rental homes fell by 0.6 percentage points from 4.1% in July 2018, the largest deceleration in rent increases for this price point in a little over a year.

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

Rent growth varies significantly across metro areas[1]. Figure 2 shows the year-over-year change in the rental index for 20 large metropolitan areas in July 2019. For the eighth consecutive month, Phoenix had the highest year-over-year rent growth this July with an increase of 7.2%, followed by Las Vegas and Tucson, both with increases of 5.7%. Miami had the lowest rent growth in July, increasing by just 1.2% from the prior year. San Diego and Orlando had the largest deceleration in rent growth in July, both showing annual rent growth of 2.3 percentage points lower than in July 2018.

[1] Metro areas used in this report are Metropolitan Statistical Areas and Metropolitan Divisions where available. The SFRI is computed for 75 metros.

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