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 June 2019 shows a national rent increase of 2.9%, compared to 3% in June 2018 – signaling the first deceleration in annual national rent prices since November 2017.
Low rental home inventory, relative to demand, fuels the growth of single-family rent prices. The SFRI shows single-family rent prices have climbed between 2010 and 2019. However, overall year-over-year rent price increases have slowed since February 2016, when they peaked at 4%, and have stabilized over the last year with a monthly average of 3.1%.
National rent growth continued to be propped up by low-end rentals in June. Rent prices among this tier, defined as properties with rent prices less than 75% of the regional median, increased 3.6% year over year in June 2019, down from a gain of 3.8% in June 2018. Meanwhile, high-end rentals, defined as properties with rent prices greater than 125% of a region’s median rent, increased 2.7% in June 2019, unchanged from June 2018 when prices among this tier also increased 2.7%.
Among the 20 metro areas shown in Table 1, and for the seventh consecutive month, Phoenix had the highest year-over-year increase in single-family rents in June 2019 at 7.1% (compared to June 2018). However, this is down month over month from the 7.4% gains Phoenix experienced in May 2019. Tucson, Arizona and Las Vegas experienced the second and third highest rent gains in June at 6.8% and 5.8 % respectively, while Miami saw the lowest rent increases of all analyzed metros at 1.1%.
Metro areas with limited new construction, low rental vacancies and strong local economies that attract new employees tend to have stronger rent growth. Phoenix experienced high year-over-year rent growth in June, driven by the annual employment growth of 3.3%. This is compared with the national employment growth average of 1.5%, according to data from the United States Bureau of Labor Statistics. Orlando, Florida also experienced an elevated annual employment growth of 3.8%, which played a role in the year-over-year rent increase of 4.2% in June.
“Increases in single-family rent across the country are fueled by increases in the number of renter households,” said Molly Boesel, principal economist at CoreLogic. “While the number of households grew overall in the United States through June, the growth was higher for renter households than for owner households, helping buoy demand for single-family rentals.”
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 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 over 80 metropolitan areas —including 45 metros with four value tiers—and a national composite index.
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