By Erik Sherman
February 16, 2022 at 07:56 AM
Highs appeared across all price tiers.
It could have been much worse; you could have been renting a single-family house in Miami. SFR rents were up 35.7% year over year as of December 2021, according to Core Logic.
The firm released its look at single-family annual rent growth for 2021. The average was 12%—a new record, the CoreLogic Single-Family Rent Index (SFRI) says, as the fastest year-over-year increase in 16 years.
The index is a comparison of rents on single family homes, including condominiums, looking at rental changes over time. December 2021’s increase was triple that of the year before. Although 2020 is a difficult baseline metric given the impact of the pandemic, the company said that while index growth had slowed in the summer of 2020, it had returned to pre-pandemic levels by October of that year.
Growth was a breakout in the three rental tiers that CoreLogic examples: low price of less than 75% of the region’s median rent, the median and surrounding prices, and high price, which meant at least 125% of the regional median.
“Rent prices for the low-price tier increased 11.2% year over year in December 2021, up from 3.9% in December 2020,” the report stated. “Meanwhile, high-price rentals increased 11.9% in December 2021, up from a gain of 4.5% in December 2020. This was the fastest increase in the history of the SFRI for both the low- and high-price rent tiers.”
Part of that growth was driven by pandemic effects, as people looked for more room to work and teach their kids at home. But the overall composition of growth has shifted. Increased rents slowed their pace for detached properties and increased for attached ones.
Miami far and away showed the fastest growth, nearly double the next largest rent increases in Phoenix. The remaining eight of the top ten were in Orlando, Las Vegas, San Diego, Dallas, Atlanta, Boston, and Tucson. It’s not surprising that most of the biggest growth was in southern states because of the demographic shifts the U.S. has been experiencing.
Another reason for skyrocketing rent rates was the difficulty many people are having in purchasing a home. “These factors have driven elevated demand for single-family rentals and put increased pressure on the market as vacancy rates also hit historic lows,” according to CoreLogic. “While slowing home price appreciation could help gradually balance demand for the rental market, rent prices will likely remain strong throughout the year.”
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