The cost of renting a single-family home grew by only 1.4 percent in June — down from 2.9 percent growth at the same time last year, according to data from property analytics provider CoreLogic. These numbers show the lowest rent price growth since May 2010. Prior to the pandemic, growth stayed stable at an average of 3 percent per year.
“National rent growth reached its slowest pace in 10 years in June, indicating that, despite the reopening of many local economies, the impacts of the pandemic are continuing to weigh on the rental market,” Molly Boesel, principal economist at CoreLogic, said in a press statement.
The biggest cause of these drops is the coronavirus pandemic, which has caused a homelessness crisis and severe disruptions to state’s economies. CoreLogic predicts that rent prices will continue to slip over the next year and might even fall if current trends continue. It’s still unclear how fluctuations in states like California, which opened up briefly before closing again, will affect rent trends in the long run.
Cities that depend heavily on the tourism and hospitality industries took some of the biggest hits. The only two big cities that saw actual drops were Honolulu and Los Angeles, at 1.2 and 0.7 percent, respectively.
Phoenix, which has been undergoing a population and job boon since last year, saw the biggest growth of 5 percent but is still down 1.5 percent from where it was in the first quarter of 2020.
“While rents slackened across the country, most metro areas maintained an increase in rents compared to this time last year,” Boesel said. “However, areas like Honolulu and Los Angeles, which continue to adhere to stricter lockdowns and shelter-in-place ordinances, experienced an annual decline in rent prices in June.”