U.S. single-family rent growth continued to downshift in June, increasing 1.4% year over year in June 2020, a sharp slowdown from the prior year, and the lowest growth rate since May 2010, 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.
Lower-priced rentals continued to prop up national rent price growth, which has been an ongoing trend since April 2014 (Figure 1). However, year-over-year growth among both tiers slowed in June 2020. Rent prices for the low-end tier, defined as properties with rent prices less than 75% of the regional median, increased 2.5% year over year in June 2020, down from 3.7% in June 2019. Meanwhile, higher-priced rentals, defined as properties with rent prices greater than 125% of a region’s median rent, increased 1% in June 2020, down from a gain of 2.5% in June 2019.
Much like the virus itself, the impact to local rental markets has varied widely as regions grapple with unemployment and manage localized economic stressors. Figure 2 shows the year-over-year change in the rental index for 20 large metropolitan areas in June 2020. Among the 20 metro areas shown, Phoenix had the highest year-over-year rent growth this June as it has since late 2018, with an increase of 5%, followed by Tucson (+2.9%) and Charlotte (+2.6%). Honolulu, which was hit hard by the collapse of the tourism market, and Los Angeles were the only two metros to experience and annual decline in rent prices, dropping 1.2% and 0.7% respectively. Las Vegas had the largest deceleration in rent growth in June, showing annual rent growth of 3.7 percentage points lower than in June 2019. U.S. unemployment rates remained elevated in June. However, some areas of the country are continuing to experience higher rates of job loss — adversely impacting rental demand and slowing rent price growth. For example, Boston experienced a dramatic, 14% decrease in employment, pushing the metro’s rent price growth below the national average, with an increase of 0.9% compared to June 2019. Meanwhile, employment declines in Phoenix and Tucson were relatively minimal in June, where rent growth remained strong. With the continued resurgence of COVID-19 cases across the country, we may expect to see further disruption of local rental markets.
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