CoreLogic® (NYSE: CLGX), a leading global property information, analytics and data-enabled solutions provider, today released a special six-month review of its Single-Family Rent Index (SFRI). The report analyzes single-family rent price changes nationally and among 20 metropolitan areas from January 2018 to June 2018. Data collected for the first half of 2018 shows that the national SFRI increased 3 percent year over year in June, and a cumulative 4.1 percent* from January to June 2018.
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 in the first half of 2018 with an average year-over-year increase of 2.8 percent.
High-end rentals, defined as properties with rent prices greater than 125 percent of a region’s median rent, saw higher cumulative rent growth of 4.2 percent from January 2018 to June 2018.* Rent price increases among low-end rentals – properties with rent prices less than 75 percent of the regional median – totaled 3.4 percent since January 2018.* On a year-over-year basis, high-end rent growth lagged behind low-end rent growth. High-end rents increased 2.8 percent year over year in June, compared with 3.9 percent year over year on the low end.
Among the 20 metro areas, Las Vegas had the highest year-over-year increase in single-family rents per month from January to June 2018, followed by Orlando and Phoenix. After experiencing seven consecutive months of decreasing year-over-year rent prices, Honolulu, saw its first year-over-year rent price increase in May 2018 at 1 percent. Rent prices in Honolulu continued to increase in June at 1.4 percent year over year.
Metro areas with limited new construction, low rental vacancies and strong local economies that attract new employees tend to have stronger rent growth. During the first half of 2018, Orlando and Phoenix saw tremendous year-over-year rent price growth averaging 5.2 and 4.7 percent from January to June 2018. Average employment growth in these areas exceeded the national rate, 1.6 percent, from January to June 2018 at 3.5 and 3.0 percent respectively.
Rent prices continue to increase in areas affected by last year’s hurricanes like the Houston metro area, which saw a cumulative growth rate of 3.3 percent during the first half of the year. The market shows impressive year-over-year increases in the first half of 2018, peaking at 4.4 percent year over year in May 2018 and settling at 3.9 percent year over year in June 2018.
"High demand and low supply of lower-priced single-family rental properties continue to push up rents for this segment of the rental market," said Molly Boesel, principal economist at CoreLogic. "With these market forces expected to stay in place in the near term, rents on lower-priced rental properties should continue to outpace those of higher-end rental properties."
*The H1 growth rate represents cumulative monthly growth for January to June 2018.
*When necessary, year-over-year data was revised. 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 over 70 Core-Based Statistical Areas (CBSAs)—including 40 CBSAs with four value tiers—and a national composite index.
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