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The price of rent continues to climb at a record pace, with single-family homes renting for 14 percent more this year than a year ago.
And if that’s not bad news for a growing pool of renters, many of whom have already been priced out of the buyer’s market, it gets worse.
“We expect single-family rent growth to continue to increase at a rapid pace throughout 2022,” said Molly Boesel, principal economist at CoreLogic, a real estate data company that tracks home price growth.
The cost of a single-family rental was 14 percent higher than a year ago in April, a report released Tuesday by CoreLogic said. That’s more than double the rate of growth from April 2021, and six times higher than April 2020. It was the 13th consecutive month of record-breaking annual price gains.
The sustained and rapid growth is due to a shortage of rental properties in the market and a thriving job market, the report said.
“Single-family rents continue to increase at record-level rates,” Boesel said. “In April, rent growth provided upward pressure on inflation, which rose at rates not seen in nearly 40 years.
Miami continued its break-neck pace of rent growth, with single-family rentals going for 40.8 percent more in April 2022 than a year ago. (In April 2021, rent grew at an annual rate of 5.6 percent.)
Orlando, Florida and Phoenix followed Miami with the second- and third-highest price growth. Rent grew 25.8 percent in Orlando and 17.8 percent in Phoenix.
Rent grew slowest in Honolulu (7.7 percent) and Philadelphia (7.8 percent), according to the report.
“Phoenix’s April 2.7% unemployment rate is likely helping drive demand and rental cost gains,” the report said, “while Philadelphia’s 6.2% unemployment rate could be causing more tenants to stay put to avoid incurring additional expenses.”
CoreLogic says the growth of multi-family rentals has been more moderate than single-family because of a rush of demand for the latter, created by the COVID-19 pandemic. The gap is starting to close.
The sources of rental income properties, foreclosed homes, all but dried up in that same time, and forecasters don’t expect there to be a backlog of distressed properties that will come on the market any time soon.
April 2022 single-family rental price chances
- Lower-priced (75 percent or less than the regional median): 13.7 percent, up from 4 percent in April 2021
- Lower-middle priced (75 percent to 100 percent of the regional median): 14.4 percent, up from 4.4 percent in April 2021
- Higher-middle priced (100 percent to 125 percent of the regional median): 14.6 percent, up from 4.6 percent in April 2021
- Higher-priced (125 percent or more than the regional median): 13.5 percent, up from 6.4 percent in April 2021