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 July 2018 shows a national rent increase of 3 percent,* compared to 2.7 percent in July 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 4.1 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 July 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 July 2018, up from a gain of 1.9 percent in July 2017. Rent prices among low-end rentals, properties with rent prices less than 75 percent of the regional median, increased 3.9 percent in July 2018, down from a gain of 4.3 percent in July 2017.
Among the 20 metro areas shown in Table 1, Orlando had the highest year-over-year increase in single-family rents in July 2018 at 6.4 percent (compared with July 2017), officially outpacing Las Vegas where rent prices led the nation throughout the first half of 2018. Las Vegas experienced the second highest rent prices in July 2018 at 5.7 percent, followed by Tucson at 4.2 percent. Seattle experienced the lowest rent price increase in July 2018 at 1.1 percent. This is the first time since the start of the year that Honolulu did not see the lowest rent price increase among the 20 analyzed metros. Rent prices in Honolulu stopped decreasing in May 2018 after seven months of decline.
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 Las Vegas experienced high year-over-year rent growth, driven by employment growth of 4.3 percent and 3.9 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, St. Louis experienced the lowest employment growth, which could be a factor in its low rent growth of 1.8 percent.
Rent prices continue to increase in areas affected by last year’s hurricanes like the Houston metro area, which experienced growth of 3.8 percent year over year in July 2018. This is down from the metro’s 2018 peak of 4.4 percent in May 2018. However, it is up from a 1.2 percent increase in October 2017, which was the first rent increase for Houston since April 2016.
“Single-family rents were quick to respond to the late-summer hurricanes in 2017 with increased rental demand showing up in higher rents in just one-two months after the disasters,” said Molly Boesel, CoreLogic principal economist. “Similar movements in rents could be seen in metro areas affected by Hurricane Florence in the following months.”
*The national CoreLogic Single-Family Rent Index was revised for July 2018 analysis. Revisions are standard, and to ensure accuracy CoreLogic incorporates newly released data to provide updated results.
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 70 Core Based Statistical Areas (CBSAs)—including 20 CBSAs with four value tiers—and a national composite index.
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