U.S. Single-Family Rents Up 9.3% Year Over Year in August
Overall Single-Family Rent Growth
U.S. single-family rent growth increased 9.3% in August 2021, the fastest year-over-year increase in over 16 years, according to the CoreLogic Single-Family Rent Index (SFRI). The index measures rent changes among single-family rental homes, including condominiums, using a repeat-rent analysis to measure the same rental properties over time. The August 2021 increase was more than four times the August 2020 increase, and while the index growth slowed last summer, rent growth is running well above pre-pandemic levels when compared with 2019.
Single-Family Rent Growth by Price Tier
Rent growth accelerated for all price tiers in August, though rents for high-priced rentals showed the highest increase. The low-price tier is defined as properties with rent prices less than 75% of the region’s median rent, and the high-price tier is defined as properties with rent prices greater than 125% of a region’s median rent (Figure 1).
Rent prices for the low-price tier, increased 7.1% year over year in August 2021, up from 2.4% in August 2020. Meanwhile, high-price rentals increased 10.5% in August 2021, up from a gain of 2.3% in August 2020. This was the fastest increase in the history of the SFRI for both the low- and high-price rent tiers.
Single-Family Rent Growth by Property Type
Differences in rent growth by property type emerged after the pandemic as renters sought out standalone properties in lower density areas (Figure 2). The detached property type tier is defined as properties with a free-standing residential building, and the attached property type tier is defined as a single-family dwelling that is attached to other single-family dwellings, which includes duplexes, triplexes, quadplexes, townhouses, row-houses, condos and co-ops.
Detached homes are preferred by would-be homebuyers who have been either priced out of the market or unable to find a home in today’s supply-constrained market, which has pushed rent up for these homes. Annual rent growth for detached rentals was 11.7% in August, compared with 6.4% for attached rentals.
Metro-Level Results
Figure 3 shows the year-over-year change in the rental index for 20 large metropolitan areas in August 2021. Among the 20 metro areas shown, Miami, with an increase of 21.4%, stood out with the highest year-over-year rent growth in August, pushing Phoenix (+19.2%) down to the second spot for the first time in almost three years. Chicago had the lowest increase at 1.4%, and Boston (+1.5%) posted positive rent growth for the first time since May 2020. All 20 metros shown in Figure 3 had higher rent growth than a year earlier.
Single-family rent growth accelerated in August 2021 and was more than four times the rate from a year earlier. Strong job and income growth, as well as fierce competition for for-sale housing, is fueling demand for single-family rentals. As space and affordability remain top priorities for renters, we can expect to see a similar trend as in the for-sale market — increased migration to less dense and lower cost areas.
To learn more about the data behind this article and what CoreLogic has to offer, visit https://www.corelogic.com/.
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