Rent skyrockets in March — especially in the Southwest

In Phoenix, rental rates soared 7.4%

Nationwide, rental rates continue to rise, particularly in the Southwest, according to the latest data from CoreLogic, released Tuesday.

Rent for the average single-family home rose by 2.9 percent in March, up from 2.7 percent during the same period last year. Some pockets of the country saw more dramatic growth, such as Phoenix, which led all price increases at 7.4 percent. Other cities like Las Vegas and Tucson weren’t far behind, at 6.9 percent and 6.3 percent, respectively.

Courtesy of CoreLogic

Such growth is the result of the Southwest’s expansion as a major work hub, according to CoreLogic. The region’s growing employment rate and strong economy is attracting more people than new construction can accommodate. In Phoenix and Las Vegas, employment grew by 2.8 percent and 2.4 percent over the past year compared to 1.7 percent nationwide.

“Single-family rents strengthened in the first quarter of 2019 compared with the same period a year ago,” said Molly Boesel, principal economist at CoreLogic. “The lowest unemployment rate in 50 years, combined with strong housing demand, have contributed to increasing rents across the country.”

Courtesy of CoreLogic

But despite such numbers from the Southwest, there are signs the rental market is beginning to cool down and stabilize. While rental rates continue to rise, growth has slowed steadily from its peak of 4.1 percent in February 2016. On average, rent grew by 3 percent when compared to an average month last year.

As in past months, affordable rentals have experienced the steepest increases in rental rates. Low-end rentals, or properties at which rent commands 75 percent less than a city’s average, grew by 3.5 percent as more people struggle to find affordable housing.

Email Veronika Bondarenko