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 February 2019 shows a national rent increase of 2.9 percent, compared to 2.7 percent in February 2018.
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 4.1 percent, and have stabilized over the last year with a monthly average of 3 percent.
National rent growth continued to be propped up by low-end rentals in February. Rent prices among this tier, defined as properties with rent prices less than 75 percent of the regional median, increased 3.7 percent year over year in February 2019, up slightly from the 3.6 percent increase experienced in February 2018. Meanwhile, high-end rentals, defined as properties with rent prices greater than 125 percent of a region’s median rent, increased 2.4 percent in February 2019, up from 2.3 percent in February 2018.
Among the 20 metro areas shown in Table 1, Phoenix had the highest year-over-year increase in single-family rents in February 2019 at 8 percent (compared to February 2018), followed by Las Vegas at 7.1 percent. Tucson, Arizona had the third highest year-over-year rent increase at 6.5 percent. And, for the first time in more than a year, Miami experienced the lowest rent increases of all analyzed metros at 1.2 percent.
Metro areas with limited new construction, low rental vacancies and strong local economies that attract new employees tend to have stronger rent growth. Phoenix and Orlando, Florida experienced high year-over-year rent growth in February, driven by employment growth of 3.1 percent and 3.9 percent year over year, respectively. These compare with the national employment growth average of 1.7 percent, according to data from the United States Bureau of Labor Statistics.
“As with the for-sale market, supply of single-family rentals saw very low levels in February, putting upward pressure on the cost of both for-sale and for-rent homes,” said Molly Boesel, principal economist at CoreLogic. “Phoenix had rapid rent increases in February with only 1.9 months of single-family rentals available. On the other hand, Miami, which had the slowest rent increases, had 7.6 months of single-family rentals available.”
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 Core Based Statistical Areas (CBSAs)—including 45 CBSAs with four value tiers—and a national composite index.
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