CoreLogic's latest U.S. Single-Family Rent Index (SFRI) shows a national rent increase of 5.3% year over year in April 2021, up from a 2.4% year-over-year increase in April 2020.
While rent growth dipped significantly last April at the start of the pandemic, rising affordability issues and supply shortages in the for-sale housing market and ongoing demographic pressure from aging millennials have continued to place upward pressure on the single-family rental market -- leading to the largest annual rent price increase in nearly 15 years in April 2021.
As demand for more space and outdoor amenities remains, detached rentals in particular are experiencing accelerated growth with a 7.9% year-over-year increase in April, compared to growth of 2.2% annually for attached rentals. This is reflected in a recent CoreLogic survey, which reported 49% of millennials and 64% of baby boomers strongly prefer to live in a single, stand-alone home. In response, developers are turning to options like build-to-rent communities of luxury single-family rentals that appeal to baby boomers looking to downsize and millennials seeking more space without sacrificing needed flexibility as companies determine remote work policies.
"Single-family rent growth showed a strong rebound in April 2021 with all price tiers back above their pre-pandemic rent growth rate," said Molly Boesel, principal economist at CoreLogic. "While rent growth slowed last April at the start of the pandemic, the rate of rent growth this April was running above pre-pandemic levels even when compared with 2019 and shows no signs of diminishing."
To gain a detailed view of single-family rental prices, CoreLogic examines four tiers of rental prices. National single-family rent growth across the four tiers, and the year-over-year changes, were as follows:
Among the 20 metro areas, Phoenix had the highest year-over-year increase in single-family rents in April 2021 at 12.2%. Tucson, Arizona, had the second-highest rent price growth with a gain of 10.6%. Atlanta, which had the lowest unemployment rate of the 20 metro areas, had the fourth-highest year-over-year rent growth of 9.1%. Conversely, Boston had an annual decline of 5.9% in rent prices and has experienced the largest decrease in 20 metros' rent prices for nine consecutive months.