- National rent growth exceeds pre-pandemic levels in February as low rental home inventory and high demand fuels single-family rent prices
- Low-end rental prices rose 2.9% in February, compared to high-end price gains of 4.4%
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. February 2021 data shows a national rent increase of 3.9% year over year, up from a 3% year-over-year increase in February 2020.
As families continue to seek out more space and face housing affordability concerns, high demand and low rental supply inventory has led to rising rental prices across almost every price tier. After growing about 3% annually since mid-2018, rent growth slowed in the spring of 2020, but bounced back in three of the four tiers to exceed the pre-pandemic growth rate beginning in October 2020. However, rent price growth of the low-price tier continues to lag behind that of high-priced rentals, reflecting the uneven U.S. job recovery, sometimes called a K-shaped recovery, seen throughout the country. Rent growth in the low-price tier remains below pre-pandemic levels as the recession continues to disproportionately affect lower-wage workers.
“While single-family rent increases overall were above the pre-pandemic rate in February, renters are not experiencing recovery the same across the board,” said Molly Boesel, principal economist at CoreLogic. “As vaccine eligibility opens up more widely and businesses continue to open their doors in response, we may see a balance of recovery.”
To gain a detailed view of single-family rental prices, CoreLogic examines four tiers of rental prices. 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 February 2020
- Lower-middle priced (75% to 100% of the regional median): 3.4%, up from 3.1% in February 2020
- Higher-middle priced (100% to 125% of the regional median): 3.9%, up from 2.8% in February 2020
- Higher-priced (125% or more than the regional median): 4.4%, up from 2.7% in February 2020
Among the 20 metro areas shown in Table 1, Tucson, Arizona, had the highest year-over-year increase in single-family rents in February 2021 at 11.2%. Phoenix had the second-highest rent price growth with a gain of 11.1%, followed by Atlanta at 8.1%. Conversely, Boston had an annual decline of 8.9% in rent prices and has experienced the largest decrease in all analyzed metros’ rent prices for seven consecutive months.
Chicago also posted an annual rent decrease of 2.9% in February 2021 compared to a year ago. Rent prices of detached rentals in Chicago increased by 4.2% in February 2021, while attached rentals decreased by 4.8%. This demonstrates the ongoing demand and prioritization among families to gain more living space.
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 50 states and 17,500 ZIP codes.
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