It’s a good time to be an owner of a single-family rental property. Low availability of single-family rental inventory mixed with high demand is sparking a surge in growth for the sector. Tenants are seeing prices climb quickly.
In October, rental prices rose nationwide 10.9% year-over-year, CoreLogic’s latest released Single-Family Rental Index shows. Vacancy rates remain at 25-year lows.
“Single-family rent growth hit its sixth consecutive record high in October 2021, mirroring record price increases in for-sale housing inventory,” says 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.”
Tight inventory in the for-sale real estate market has displaced some potential buyers, Boesel notes. That has sparked a tidal wave of demand in single-family rentals.
The largest jump in single-family rental growth has occurred in high-priced tiers—those that are priced at 125% or more of the region’s median. That tier has seen growth at 11.4% over the past year, followed by the higher-middle priced tier—100% to 125% of the regional median–which has posted growth of 11.3%.
The metro areas posting the largest year-over-year increase in single-family rents in October were:
- Miami: 29.7%
- Phoenix: 19.3%
- Las Vegas: 16.5%
These three metros have seen rapid growth as tourism returns and its local labor markets improve, CoreLogic researchers note.