Rental housing in Corona del Mar, California.
Scott Murin | CNBC
Even as Coronavirus pandemic Ebb tides and Americans return to work and play, they still want more space at home. However, demand for single-family rental homes is skyrocketing as home prices hit record highs.
Household rents rose 5.3% year-on-year in April, up from 2.4% in April 2020, according to CoreLogic. This is the biggest profit in almost 15 years.
Rents for single-family homes (not town homes) have risen another 7.9% compared to a year ago, especially as millennials demand more outdoor space. Nearly half of millennials and 64% of baby boomers surveyed by Corelogic say they “strongly want” to live in a single-family home.
Molly Boesel, Principal Economist at CoreLogic, said: “Although the rent increase in April last year, when the pandemic began, slowed down, the rent increase rate in April this year is higher than the pre-pandemic level compared to 2019, and there are no signs of a decrease.”
Rent increases span all price categories, including the low end, which first outpaced pre-pandemic rent increases. The benefits by category are:
・ Low price (75% or less from the median region): Increased from 3.2% in April 2020 to 3.9%
・ Low to medium price (75% to 100% of median region): 4.8%, up from 2.5% in April 2020
・ High and medium price (100% to 125% of median region): 5.1%, increased from 2.3% April 2020
・ Higher price (More than 125% from the median region): 6.2%, up from 2.2% in April 2020
Regionally, in the top 20 metropolitan markets, single-family rents were 12.2% higher than they were a year ago in Phoenix, with the highest rent increases. Next, Tucson, Arizona increased by 10.6%. Las Vegas was followed by 9.3%. Atlanta, which had the lowest unemployment rate of the 20 metropolitan areas, came in fourth with 9.1%.
Conversely, Boston saw 5.9% annual rent declines, with the largest decline in rents in 20 metropolitan markets for the ninth straight month. Chicago was the only other decliner at 2.6%.
Home prices continue to rise at double-digit paces and more potential buyers are being cut, so it’s unlikely that demand for single-family rentals will soon cool down.
“Inflation here is slowing the most interest rate-sensitive part of the economy, housing,” said Peter Bookbar, chief investment officer of the Brigley Advisory Group.
Single-family home rents have risen the most in nearly 15 years
Source link Single-family home rents have risen the most in nearly 15 years