Annual Rent Gains Hold Steady in August

US Single-Family Rents Up 3% Year Over Year in August

By Molly Boesel Consumer Behavior, Mortgage Finance

  • Rents for lower-priced homes increased faster than those of higher-priced homes in August compared with a year earlier.
  • Rent increases were highest in the Southwest, with Phoenix taking the top spot.
  • Houston and Orlando had the largest deceleration in annual rent growth

U.S. single-family rents increased 3% year over year in August 2019, down from a 3.1% increase in August 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%.

Using the rent index to analyze specific price tiers reveals important differences. Figure 1 shows that the index’s overall growth in August 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 3.7% 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. Comparing this August with August 2018, the pace of annual rent growth for lower-priced rental homes fell by 0.3 percentage points and the pace of rent growth for higher-priced homes was unchanged from a year earlier.

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

Rent growth varies significantly across metro areas1. Figure 2 shows the year-over-year change in the rental index for 20 large metropolitan areas in August 2019. For the ninth consecutive month, Phoenix had the highest year-over-year rent growth this August with an increase of 6.6%, followed by Las Vegas (+5.8%) and Tucson (+5.3%). Miami had the lowest rent growth in August, increasing by 1.5% from the prior year. Houston and Orlando had the largest deceleration in rent growth in August, both showing annual rent growth of 2.1 percentage points lower than in August 2018. Despite the large slowdown in rent growth from a year earlier, Orlando was still in the top 20% for rent increases and had the highest annual job growth of the 20 metros analyzed.

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

[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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