An analysis of single-family rents in 20 metros shows a 2.9% year-over-year increase in December
The annual pace of rent growth across 20 metro areas analyzed by CoreLogic shows a slight decrease in December compared to a year earlier (3%).
“Strong economic growth, including the lowest unemployment rate in over 50 years, helped push up rents by an average of 3% in 2019, which was the fastest rent appreciation since 2016,” said Molly Boesel, principal economist at CoreLogic.
The firm’s Single-Family Rent Index has stabilized at around 3% since early 2019. They peaked at 4.2% in February 2016.
Phoenix remains the metro where annual single-family rent increased the most – at 6.7% year-over-year – driven by a 3.2% growth in employment. The top three was completed to Tucson, Arizona (5.7%) and Las Vegas (5.1%).
The smallest annual increase was in Honolulu at just 0.5%.
Nationally, low-end rentals (properties with rent prices less than 75% of the regional median) drove overall rent increases with a 3.4% year-over-year increase, down from annual growth of 3.9% a year earlier.
High-end rentals (properties with rent prices greater than 125% of a region’s median rent) increased 2.5% in December 2019, down from a gain of 2.7% in December 2018.
But the lower overall pace of annual increase could be short-lived said Boesel.
“Employment growth is expected to remain strong in 2020. This, coupled with rental vacancies reaching a 34-year low in the last quarter of 2019, could lead to continued rent increases in the near term,” she said.
