Across the United States, renting a single-family home is getting more and more expensive by the month. According to the latest Single-Family Rent Index report from CoreLogic released on Tuesday, rent prices rose 6.6 percent in May from this time last year.
Prices have risen at the highest level since January 2005, fueled by a lack of available inventory on the market amid high demand and growing prices. Considering that rent prices last year were at 1.7 percent growth, the 6.6 percent growth is enormous.
According to a report from the U.S Census Bureau, 94.5 percent of single-family rentals in the country are currently occupied, up from 93.7 percent last year.
“Single-family rents rose by nearly four times the rate from a year earlier in May 2021,” Molly Boesel, principal economist at CoreLogic, said in a prepared statement. “Strong job and income growth, as well as fierce competition for for-sale housing, is fueling demand for single-family rentals. Looking ahead, these market forces are expected to remain for much of the year and keep rent increases high, particularly in urban areas and tech hubs as more people return to working in person.”
Higher-end homes worth 125 percent or more of an area’s median price saw the steepest increases, at 7.9 percent from May 2020. Higher-middle priced (100 to 125 percent of an area’s median home) grew by 6.2 percent while lower-end homes (worth less than 75 percent of an area’s median price) grew the least but still increased significantly at 4.6 percent.
Phoenix, which has been seeing a trifecta of monumental home value, job market and population growth throughout the pandemic, once again saw the highest rent price increases at 14 percent. Tucson, Arizona, and Las Vegas were close behind, at 11.1 and 10.7 percent, respectively.
Boston, where the rental market was hit significantly after higher education switched to remote learning amid the pandemic, saw the largest rental price decline of any American city for the 11 month in a row now. In May, rental prices in Boston dropped by 4.5 percent, while Chicago prices also fell but by a lower 2.1 percent.