Rent growth rates for single-family homes doubled over the past year.
CoreLogic’s Single-Family Rent Index (SFRI) from April showed a “national rent increase of 5.3% year over year, up from a 2.4% year-over-year increase in April 2020.”
As the group summarizes:
While rent growth dipped significantly last April at the start of the pandemic, rising affordability issues and supply shortages in the for-sale housing market and ongoing demographic pressure from aging millennials have continued to place upward pressure on the single-family rental market — leading to the largest annual rent price increase in nearly 15 years in April 2021.
As demand for more space and outdoor amenities remains, detached rentals in particular are experiencing accelerated growth with a 7.9% year-over-year increase in April, compared to growth of 2.2% annually for attached rentals. This is reflected in a recent CoreLogic survey, which reported 49% of millennials and 64% of baby boomers strongly prefer to live in a single, stand-alone home.
“Single-family rent growth showed a strong rebound in April 2021 with all price tiers back above their pre-pandemic rent growth rate,” remarked CoreLogic principal economist Molly Boesel. “While rent growth slowed last April at the start of the pandemic, the rate of rent growth this April was running above pre-pandemic levels even when compared with 2019 and shows no signs of diminishing.”
Cities in Arizona, Texas, and Florida saw fast recoveries in average rents. Phoenix’s rental rates increased year-over-year by 12.2%; meanwhile, Austin and Miami saw 8.5% and 4.5% increases.
Among the cities that saw decreases in single-family rental costs were Boston and Chicago, with 5.9% and 2.6% price drops respectively.
CoreLogic’s data mirror one recent survey, which reveals that Florida and Arizona saw positive net migration into the state, while New York, California, and Illinois saw negative net migration.
CoreLogic’s findings also align with those of Moody’s Analytics and CNN Business’ Back-to-Normal Index. The report revealed that South Dakota and Florida are the only two states with economies that have expanded since COVID-19 and the lockdown-induced recession. Other states that quickly rescinded lockdown orders saw robust economic recovery.
On a global scale, China is significantly outpacing other leading economies in post-COVID growth. A report from the Organization for Economic Cooperation (OECD) found that China’s economy expanded by 18.3% between the first quarter of 2020 and the first quarter of 2021.