- Low-end rental prices rose 2.9%, compared to high-end price gains of 4.2% in January
- Supply and demand challenges in the for-sale market continue to fuel growth in rental market
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 across major metropolitan areas. January 2021 data shows a national rent increase of 3.8% year over year, up from a 2.9% year-over-year increase in January 2020.
In January, rent growth continued to show promising strength. National rent prices reached the largest annual gain since June of 2016, and prices in three of the four price tiers exceeded pre-pandemic levels. With fewer affordable homes available for purchase, and ongoing consumer desire for more space, single-family rental vacancy rates will continue to be squeezed — spurring further increases in rents. A survey from CoreLogic, conducted in February 2021, found that 48% of non-homeowners who were not able to find a home to buy in their price range and desired location would continue to rent.
“As rising home prices persist, some prospective buyers are being priced out of the housing market, keeping many households as renters,” said Molly Boesel, principal economist at CoreLogic. “This demand for rentals will push down single-family rental vacancy rates and put further upward pressure on rent growth this year, especially as the economy continues to recover.”
To gain a detailed view of single-family rental prices, CoreLogic examines four tiers of rental prices. Three of the higher price tiers returned to pre-pandemic growth rates by November of 2020, while rent increases in the lowest tier continued to lag in January of 2021. National single-family rent growth across the four tiers, and the year-over-year changes, were as follows:
- Lower-priced (75% or less than the regional median): 2.9%, down from 3.7% in January 2020
- Lower-middle priced (75% to 100% of the regional median): 3.5%, up from 3.2% in January 2020
- Higher-middle priced (100% to 125% of the regional median): 4%, up from 2.8% in January 2020
- Higher-priced (125% or more than the regional median): 4.2%, up from 2.5% in January 2020
Among the 20 metro areas shown in Table 1, and for 26 consecutive months, Phoenix had the highest year-over-year increase in single-family rents in January 2021 at 11%. Tucson, Arizona, had the second-highest rent price growth with a gain of 9.8%, followed by Charlotte, North Carolina, at 7.6%. Conversely, Boston had an 8.6% annual decline in rent prices and has experienced the largest decrease in all analyzed metros’ rent prices for six consecutive months.
While rent prices of detached rentals in Boston decreased by just 0.5%, attached rentals experienced a decrease of 9.1%, demonstrating the continued impact of the lack of college students returning to the city, and the demand and prioritization by families to gain more living space. Comparatively, Chicago, which posted the second-lowest rent price decrease of 2.3%, had a 4.2% decrease in attached rentals and a 3.6% increase in detached 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.
The CoreLogic Single-Family Rent Index analyzes data across four price tiers: Lower-priced, which represent rentals with prices 75% or below the regional median; lower-middle, 75% to 100% of the regional median; higher-middle, 100%-125% of the regional median; and higher-priced, 125% or more above the regional median.
Median rent price data is produced monthly by CoreLogic RentalTrends. RentalTrends is built on a database of more than 11 million rental properties (over 75% of all U.S. individual owned rental properties) and covers all
About the CoreLogic Consumer Housing Sentiment Survey
In February 2021, 3,699 adults in the U.S., with an estimated 1,020 non-homeowners and 2,679 current homeowners, were surveyed by CoreLogic through survey platform YouGov. The survey provides a pulse on U.S. housing market dynamics and purchase intentions. Fieldwork was undertaken between February 16-22, 2021. The survey was carried out online. The figures have been weighted and are representative of all US adults (aged 18+).
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