A staggering increase in rental prices across the country is threatening affordability and contributing to an ongoing inflation crisis, according to CoreLogic, a leading global property information, analytics and data-enabled solutions provider. Based on their Single-Family Rent Index (SFRI), which analyzes single-family rent price changes nationally and across major metropolitan areas, October 2021 data shows a national rent increase of 10.9% year over year, up from a 3.2% year-over-year increase in October 2020.
Rent prices continued their strong upward movement into the fourth quarter of the year as vacancy rates remained near 25-year lows. Tight inventory in the for-sale market has also displaced many potential buyers and forced more demand into single-family rentals as their next best option.
“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.”
To gain a detailed view of single-family rental prices, CoreLogic examines four tiers of rental prices. National single-family rent growth across the four tiers, and the year-over-year changes, were as follows:
- Lower-priced (75% or less than the regional median): 9.5%, up from 2.8% in October 2020
- Lower-middle priced (75% to 100% of the regional median): 10.1%, up from 2.8% in October 2020
- Higher-middle priced (100% to 125% of the regional median): 11.3%, up from 3% inOctober 2020
- Higher-priced (125% or more than the regional median): 11.4%, up from 3.5% in October 2020
Among the 20 metro areas shown in Table 1, Miami had the highest year-over-year increase in single-family rents in October 2021 at 29.7%, followed by Phoenix and Las Vegas at 19.3% and 16.5%, respectively. These major metros have continued to experience rapid growth as tourism returns and local labor markets improve. While Chicago logged the lowest annual rent price growth at 4.2% in October, this is still more than double its pre-pandemic growth rate.
The next CoreLogic Single-Family Rent Index will be released on January 18, 2022, featuring data for November 2021. For ongoing housing trends and data, visit the CoreLogic Intelligence Blog: www.corelogic.com/intelligence.
The single-family rental market accounts for half of the rental housing stock, yet unlike the multifamily market, which has many different sources of rent data, there are minimal quality adjusted single-family rent transaction data. The CoreLogic Single-Family Rent Index (SFRI) serves to fill that void by applying a repeat pairing methodology to single-family rental listing data in the Multiple Listing Service. CoreLogic constructed the SFRI for close to 100 metropolitan areas — including 47 metros with four value tiers — and a national composite index.
The CoreLogic Single-Family Rent Index analyzes data across four price tiers: Lower-priced, which represent rentals with prices 75% or below the regional median; lower-middle, 75% to 100% of the regional median; higher-middle, 100%-125% of the regional median; and higher-priced, 125% or more above the regional median.
Median rent price data is produced monthly by CoreLogic RentalTrends. RentalTrends is built on a database of more than 11 million rental properties (over 75% of all U.S. individual owned rental properties) and covers all 50 states and 17,500 ZIP codes.