CoreLogic reported that the year-over-year rent growth for single-family rentals (SFRs) in January was 12.6 percent. This is the highest rate they have seen in the 17 years that they have been collecting this data.
To put this level of rent growth into context, prior to April 2020, year-over-year SFR rent growth had never exceeded 5.1 percent, a high first reached in 2006. Since April 2020, year-over-year rent growth has not only exceeded this level every month, but every month a new data-series record high for rent growth has been set.
What do they measure?
CoreLogic, a data and analytics company, collects rent data on all types of single-family rentals, including attached properties, detached properties and condominiums. The data is gathered from single-family rental data on the Multiple Listing Service, and it covers more than 11 million rental properties in the United States. CoreLogic bases their rent growth computations on changes in same-unit rents.
Parsing the data
CoreLogic provides different ways of looking at the SFR rent growth, one of which is by pricing level. Rental units whose rent is less than 75 percent of the area’s median rent are classified as Low Tier units. Year-over-year rent growth for these units in January was 12.0 percent. Rental units whose rent is more than 125 percent of the area’s median rent are classified as High Tier units. Year-over-year rent growth for these units in January was 12.2 percent.
CoreLogic also parses the SFR rent growth data by whether the unit is attached or detached. The data shows that the year-over-year rent growth for SFR detached units started to rise earlier than did that for SFR attached units. This reflects renters’ preferences for distancing themselves from their neighbors in the early days of the pandemic. Rent growth for SFR detached units exceeded 5 percent starting in November 2020. Rent growth for SFR attached units did not exceed 5 percent until 8 months later, in July 2021.
Rent growth for both types of units has continued to rise with year-over-year SFR rent growth for detached units reaching 12.4 percent and rent growth for attached units reaching 12.2 percent in January.
The CoreLogic report provides year-over-year SFR rent growth data for a limited selection of metro areas. The most remarkable thing about this data is that the rent growth for the Miami metro area was reported to be nearly double that of the metro with the next highest rate of rent growth. Miami year-over-year rent growth came in at 38.6 percent in January. Orlando was the next highest metro for rent growth with a level of 19.9 percent.
By comparison, Yardi Matrix reported that year-over-year SFR rent growth in February reached 14.9 percent. They found that the highest rent growth was in Orlando, followed by Miami.
The CoreLogic report may be found here.
