Single-family rents posted their fastest increase in more than 16 years Americans continue to desire larger living spaces amid the pandemic. Investors taking notice are flooding the market to capture more rentals.
U.S. single-family rents were up 9.3% year over year in August, approaching double-digit gains, according to CoreLogic’s Single-Family Rent Index. The increase in August was more than quadruple the increase from August 2020. While that reflects a slowed market, rent growth is running well-above pre-pandemic levels as well.
“Converging economic trends are driving a surge in single-family rent prices, and consumer confidence has driven an uptick in demand for both renters and buyers,” Molly Boesel, an economist at CoreLogic, said in a statement. “The ongoing preference toward more living space—and slim for-sale inventory—is forcing would-be buyers back into renting, putting significant strain on the single-family rental market.”
Rent growth is increasing across pricing tiers. However, it is strongest for higher-priced rentals, increasing 10.5% over the past year for that segment. The low-price tier, for which rent prices are less than 75% of the region’s median rent, rose 7.1% over the past year for comparison, according to CoreLogic.
Among the metro areas, Miami saw the largest increase in single-family rentals, jumping 21.4% year over year in August, followed by Phoenix at 19.2%.