2019 Saw the Fastest Annual Rent Appreciation Since 2016

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

By Molly Boesel Housing Affordability

  • Rents for lower-priced homes increased faster than those of higher-priced homes in December compared with a year earlier.
  • Rent increases were highest in the Southwest.

Strong economic growth, including the lowest unemployment rate in over 50 years, helped push up rents by an average of 3% in 2019, which was the fastest annual rent appreciation since 2016. U.S. single-family rents increased 2.9% year over year in December 2019, down a bit from the gain of 3% in December 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. Strong economic growth and the lowest unemployment rate in over 50 years helped push single-family rents up by an average of 3% in 2019, which was the fastest rent appreciation since 2016.

Figure 1: 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 December 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 3.4% year over year and rents for higher-priced homes, defined as properties with rents more than 125% of the regional median rent, increased 2.5% year over year. Rents for lower-priced homes have been growing faster than for higher-priced homes since May 2014, though the difference in these two growth rates has narrowed over time.

Figure 2: 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 December 2019. Phoenix had the highest year-over-year rent growth this December as it has since December 2018, with an increase of 6.7%, followed by Tucson (+5.7%) and Las Vegas (+5.1%). Honolulu had the lowest rent growth in December, increasing by 0.4% from the prior year. Orlando had the largest deceleration in rent growth in December, showing annual rent growth of 2.9 percentage points lower than in December 2018. Boston had the largest acceleration in rent growth in December, with rents increasing 2.4 percentage points faster than in December 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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