The cost of renting a single-family home has grown at its fastest pace since 2016, according to new CoreLogic data released Tuesday.

Nationwide, monthly rent for a single-family home grew by 3.2 percent to an average of $1,420 in January, up from one year ago when rent had grown by only 2.7 percent. After peaking at 4.2 percent growth in February 2016, rent prices have stabilized somewhat over the past three years.

“Rent prices for single-family homes increased 3.2 percent in January, which was the fastest increase in more than two years,” said Molly Boesel, principal economist at CoreLogic, in a prepared statement. “Demand for single-family rentals has remained brisk, and while employment growth has played a role in rental demand, demographics have as well.”

CoreLogic

Rental properties priced 75 percent less than an area’s median grew by 3.8 percent, indicating competition remains stiff nationwide. High-end rentals where rent hovers at 125 percent more than an area’s median, grew by only 2.9 percent.

Out of the country’s 20 largest cities, Phoenix experienced the most drastic changes, with rental commanding prices 7.7 percent higher than in January 2018. Las Vegas followed with a 7 percent year-over-year spike. The escalation is caused by each city’s rapid growth and strong economy, according to CoreLogic, and as more people relocate, housing construction often fails to keep up the pace.

CoreLogic

The challenges Phoenix and Las Vegas face can be seen nationwide, according to the CoreLogic report. Low inventory across the country all but guarantees that renters will pay more for what little remains on the market, Boesel said.

“Households headed by someone under the age of 35 are more likely to rent than own, and with nearly a quarter of the U.S. population between the ages of 18 and 35, this age group continues to feed the demand for single-family rentals,” Boesel said.

Email Veronika Bondarenko

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