CoreLogic® (NYSE: CLGX), a leading global property information, analytics and data-enabled solutions provider, today released its latest Single-Family Rent Index (SFRI), which analyzes single-family rent price changes nationally and among 20 metropolitan areas. Data collected for April 2018 shows a national rent increase of 2.9 percent, compared to 2.6 percent in April 2017.
Low rental home inventory, relative to demand, fuels the growth of single-family rent prices. The SFRI shows that single-family rent prices have climbed between 2010 and 2018. However, year-over-year rent price increases have slowed since February 2016, when they peaked at 4.2 percent, and have stabilized over the last year with a monthly average of 2.7 percent.
High-end rentals continued to dampen national rent growth in April 2018, despite accelerating rates of increase among this tier. High-end rentals, defined as properties with rent prices greater than 125 percent of a region’s median rent, saw rent increases of 2.7 percent year over year in April 2018, up from a gain of 1.6 percent in April 2017. Rent prices among low-end rentals – properties with rent prices less than 75 percent of the regional median – increased 4.2 percent in April 2018, down from a gain of 4.4 percent in April 2017. Rent prices for both the high- and low-tiers experienced significant month-over-month growth, compared to increases of 2.2 percent and 3.9 percent in March 2018 respectively.
Among the 20 metro areas shown in Table 1, Las Vegas once again had the highest year-over-year increase in single-family rents in April 2018 at 5.9 percent (compared with April 2017), followed by Phoenix (5.5 percent increase) and Orlando (5.3 percent increase). For the sixth consecutive month, Honolulu was the only metro with decreasing rent prices, declining 0.3 percent year over year in April 2018.
Metro areas with limited new construction, low rental vacancies and strong local economies that attract new employees tend to have stronger rent growth. Both Orlando and Phoenix experienced high year-over-year rent growth, driven by employment growth of 3.2 percent and 2.8 percent year over year respectively. This is compared with the national employment growth average of 1.6 percent, according to data from the United States Bureau of Labor Statistics. Of the 20 metros analyzed, Chicago experienced the lowest employment growth, which could be a factor in its low rent growth of 1.0 percent.
Rent prices continue to increase in areas affected by last year’s hurricanes like the Houston metro area, which experienced growth of 4.1 percent year over year in April 2018. This is up from a 3.4 percent increase in March 2018 and a 1.1 percent increase in October 2017, which was the first rent increase for Houston since April 2016.
“Rent prices increased significantly across the country in April, with the southwest region showing the highest growth rates,” said Molly Boesel, principal economist at CoreLogic. “National employment growth has remained steady in 2018, which could be a driver of continued rent increases.”
The single-family rental market accounts for half of the rental housing stock, yet unlike the multifamily market, which has many different sources of rent data, there are minimal quality adjusted single-family rent transaction data. The CoreLogic Single-Family Repeat Rent Index (SFRI) serves to fill that void by applying a repeat pairing methodology to single-family rental listing data in the Multiple Listing Service. CoreLogic constructed the SFRI for 70 Core Based Statistical Areas (CBSAs)—including 20 CBSAs with four value tiers—and a national composite index.
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