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 March 2019 shows a national rent increase of 2.9%, compared to 2.7% in March 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%, and have stabilized over the last year with a monthly average of 3%.
National rent growth continued to be propped up by low-end rentals in March. Rent prices among this tier, defined as properties with rent prices less than 75% of the regional median, increased 3.5% year over year in March 2019, down from the 3.9% increase experienced in March 2018. Meanwhile, high-end rentals, defined as properties with rent prices greater than 125% of a region’s median rent, increased 2.4% in March 2019, up from 2.1% in March 2018.
Among the 20 metro areas shown in Table 1, Phoenix had the highest year-over-year increase in single-family rents in March 2019 at 7.4% (compared to March 2018), followed by Las Vegas at 6.9%. Tucson, Arizona had the third highest year-over-year rent increase at 6.3%. And, for the second consecutive month, Miami experienced the lowest rent increases of all analyzed metros at 0.4% – its lowest year-over-year rent growth since December 2017.
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 Las Vegas experienced high year-over-year rent growth in March, driven by employment growth of 2.8% and 2.4% year over year, respectively. These compare with the national employment growth average of 1.7%, according to data from the United States Bureau of Labor Statistics.
“Single-family rents strengthened in the first quarter of 2019 compared with the same period a year ago,” said Molly Boesel, principal economist at CoreLogic. “The lowest unemployment rate in 50 years, combined with strong housing demand, have contributed to increasing rents across the country.”
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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