Limited inventory forces more homebuyer demand into single-family rentals
Single-family rent prices continued to rise in the fourth quarter as vacancy rates hovered around 25-year lows.
Data from CoreLogic’s Single-Family Rent Index (SFRI) showed that national rents increased by 10.9% year over year in October, up from a 3.2% year-over-year uptick in October 2020.
“Single-family rent growth hit its sixth consecutive record high in October 2021, mirroring record price increases in the for-sale housing market,” said Molly Boesel, principal economist at CoreLogic. “Rent growth in October 2020 had already recovered from pre-pandemic lows, and rent growth this October was more than three times that of a year earlier.”
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According to the report, the low supply of homes for sale in the market has displaced many potential buyers, making single-family rentals their next best option.
All four tiers of rental prices posted increases in October. Lower-priced rent prices jumped from 2.8% to 9.5% month over month, and lower-middle priced rentals were up 2.8% to 10.1%. On the other end of the spectrum, higher-middle-priced rent prices rose to 11.3%, and higher-priced rents climbed to 11.4%.
Among the 20 metros analyzed in CoreLogic’s report, Miami had the highest annual gain in single-family rents in October at 29.7%, followed by Phoenix at 19.3%, and Las Vegas at 16.5%. Meanwhile, Chicago saw the lowest year-over-year rent price growth at 4.2%.
