CoreLogic reported that their single-family rent index (SFRI) for September rose 2.6 percent from its year-earlier level. This is down from the 2.9 percent year-over-year rent growth reported last month. September marks 17 months of continuous declines in the rate of year-over-year rent growth.
The pandemic effect
The history of the overall SFRI growth rate since January 2020 is shown in the first chart, below.
The chart shows that the year-over-year rent growth rate is well below the peak it reached during the pandemic. However, the current growth rate is in line with what was seen before the pandemic.
For comparison, Yardi Matrix found that single-family rent growth in September was 0.4 percent year-over-year. However, Yardi Matrix focuses on properties of 50 or more units while CoreLogic takes a broader look at the single-family rental market.
Price tiers diverge
In addition to the overall SFRI, CoreLogic calculates SFR rent growth by the relative asking rent for the properties it covers. It divides the properties into 4 groups: those priced at 75 percent or less than the regional median (Low), those priced at 75 to 100 percent of regional median (Low-mid), those priced at 100 to 125 percent of regional median (High-mid) and those priced above 125 percent of regional median (High). The results for September 2023 are shown in the next chart, below.
The chart shows that the average SFR rent growth in the lowest tier is almost twice that in the highest tier.
Metro focus
CoreLogic reports the year-over-year rate of single-family rent growth for a select group of metropolitan areas. St. Louis remained in the top position for highest rent growth rate for the third straight month despite its rent growth rate falling for the month. It recorded SFR rent growth of 6.8 percent, down from 7.0 percent last month and 7.2 percent the month before. San Diego rose to second place as its rent growth rate increased from 5.6 percent last month to 6.0 percent. Boston (5.1 percent) remained in third place while Chicago (5.0 percent) dropped to fourth place. New York (4.7 percent) again rounded out the top 5 metros.
The same three metros that saw SFR rents decline last month also saw them decline in September. The metros are Austin (-1.4 percent), Miami (-0.7 percent) and Las Vegas (-0.2 percent),
CoreLogic is a data and analytics company. It calculates the SFRI using “a repeat pairing methodology to single-family rental listing data in the Multiple Listing Service.” The CoreLogic report is available here.
