EDITOR'S NOTE: As the housing market remains sky-high, the prices in the rental market are rising dramatically along with it. CNBC reports that “Rents for single-family homes increased 10.2% nationally in September year over year, up from a 2.6% rise in September of last year, according to a new report from CoreLogic.” The record lack of demand coupled with many potential buyers being priced out of the buying market is leading to this rent surge. Rent growth is strong at every price point but is most pronounced at the top of the market. It is also most evident in larger desirable cities that people are migrating to such as Miami, Phoenix, Las Vegas, Austin, and San Diego. These skyrocketing rents are least pronounced in major metropolitan areas that people are leaving, such as Chicago, Boston, Philadelphia, Washington D.C., and New York City.
- Rents for single-family homes rose 10.2% nationally in September year over year, up from a 2.6% increase in September of last year.
- Miami saw the highest rent increase in the nation.
- The priciest rental homes are seeing the strongest rent increases.
Rents for single-family homes increased 10.2% nationally in September year over year, up from a 2.6% rise in September of last year, according to a new report from CoreLogic.
Improved job growth and sky-high prices in the for-sale housing market added to already strong demand for single-family rentals fueled by the coronavirus pandemic.
The single-family market is particularly hot right now, as people want more space and as the huge millennial generation ages into marriage and parenthood.
“Single-family rental vacancy rates remained near 25-year lows in the third quarter of 2021, pushing annual rent growth to double digits in September,” said Molly Boesel, principal economist at CoreLogic. “Rent growth should continue to be robust in the near term, especially as the labor market improves and the demand for larger homes continues.”
Rent growth is strong in every price tier, but strongest at the very top:
- Lower-priced (75% or less than the regional median): 8.3%, up from 2.4% in September 2020
- Lower-middle priced (75% to 100% of the regional median): 9.3%, up from 2.3% in September 2020
- Higher-middle priced (100% to 125% of the regional median): 10.5%, up from 2.4% in September 2020
- Higher-priced (125% or more than the regional median): 11%, up from 2.8% in September 2020
Some markets are hotter than others. Rent growth was strongest in Miami, with a stunning 25.7% year-over-year gain. Miami also has one of the highest median rents in the country.
On the bottom, Chicago, Boston, Philadelphia, Washington D.C., and the New York City metropolitan area are seeing the lowest rent growth of under 5% from a year ago.
Originally posted on CNBC.