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Single-Family Homes: Largest Rent Gains Since 2005

Single-Family Homes
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EDITOR NOTE: The pandemic may have pushed supply chains to their limits causing prices to rise across several sectors of the economy, but this event, unprecedented as it was, merely triggered an economic vulnerability that already lay open--a precondition of weakness that invited the parasitic destruction of its own host. One area of the US economy that has been hit hard by inflation is the housing market. As home prices rise, single-family homes and rentals have skyrocketed across all income levels--from rents in the lowest-income areas to the wealthiest neighborhoods. Purchasing power in the housing and rental market, not to mention other areas of the economy, is rapidly deteriorating. Years ago, when the monetary regime, still under Yellen, began showing signs of accelerated deterioration, we warned our readers of an “everything bubble,” urging them to diversify their assets into non-CUSIP gold and silver. Nearly half a decade later, the situation we warned about had materialized, partly boosted by the unprecedented event of a pandemic. Nobody could have predicted the pandemic. But anyone could have forecasted economic folly based on simple and sound principles. And what we saw led to what American households are struggling with now. In short: it’s always a good idea to invest in safe-haven assets.

Even as the coronavirus pandemic ebbs and Americans get back to work and play, they still want more space at home. But with home prices hitting record highs, demand for single-family rental homes is soaring – and so are the rents. 

Single-family rents were up 5.3% year over year in April, rising from a 2.4% increase in April 2020, according to CoreLogic. That is the largest gain in nearly 15 years.

Rents for single-family detached homes (not townhomes), were up an even stronger 7.9% compared with a year ago, as millennials in particular seek more outdoor space. Nearly half of millennials surveyed by Corelogic, and 64% of baby boomers, said they, “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,” said Molly Boesel, principal economist at CoreLogic. “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.”

Originally posted on CNBC

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