Although June’s rental prices were the highest since 2005, July’s numbers set new records yet again. According to the latest Single-Family Rent Index report from CoreLogic released on Tuesday, rent for a single-family home increased by 8.5 percent year over year in July compared to 7.5 percent in June.
Up 1.7 percent since July 2020, the numbers seen this month increased fivefold for the second month in a row. They are also at a 16.5-year high in large part due to the inventory shortage and subsequently skyrocketing home values seen across the country over the last five years.
While great for homeowners, such growth is creating a larger and larger gap between those who own homes and those who don’t. As a result, those who give away their income for rent have even smaller sums each month to set aside for a future down payment.
While the pandemic saw rent decreases in cities with a large student population like Boston, those numbers are also starting to bounce back. Phoenix, Miami and Las Vegas saw the highest jumps in rental prices at 18.9, 17 and 14.3 percent, respectively.
“Single-family rent prices continue to climb as national economic recovery, the overcrowded purchase market and deficient inventory puts pressure on the rental market,” Molly Boesel, principal economist at CoreLogic, said in a prepared statement. “With eviction moratoriums coming to a close this fall, and single-family rental inflation showing no signs of slowing over the next several months, affordability challenges may begin to pose a more urgent concern for renters.”
Higher-end homes worth 125 percent or more of an area’s median price saw the largest growth at 9.8 percent from June 2020. Higher-middle priced (100 to 125 percent of an area’s median home) properties grew by 8 percent while lower-middle priced (75 percent to 100 percent of the regional median) increased by 7.2 percent. Lower-priced homes (worth less than 75 percent of an area’s median price) grew the least but, at 5.9 percent growth, still increased at quite a significant amount.