Residential Rent Growth Extends Record-Breaking Streak in Early 2022

Residential Rent Growth Extends Record-Breaking Streak in Early 2022

Residential News » Miami Edition | By Michael Gerrity | May 2, 2022 8:38 AM ET

Based on CoreLogic's latest Single-Family Rent Index (SFRI), U.S. residential rent prices continued their double-digit gains in February 2022, rising 13.1% from one year earlier to hit another new record as the highest in the history of the index. Warmer areas of the country again posted the largest price hikes, with rents in Miami up 39.5% from February 2021. A shortage of available rentals has contributed to the prolonged run-up in price growth, as has the low U.S. unemployment rate, which dropped to 3.8% in February. Also, robust home price increases, up 20% year over year in February, are likely contributing to more Americans renting rather than buying.

"Single-family rents rose at more than three times the rate from a year earlier and more than four times the pre-pandemic rate," said Molly Boesel, principal economist at CoreLogic. "Strong employment and low supply have pushed single-family rental vacancy rates to low levels and have contributed to the high growth in rents."

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:

  • Lower-priced (75% or less than the regional median): 12.7%, up from 3% in February 2021
  • Lower-middle priced (75% to 100% of the regional median): 13.8%, up from 3.2% in February 2021
  • Higher-middle priced (100% to 125% of the regional median): 13.9%, up from 3.6% in February 2021
  • Higher-priced (125% or more than the regional median): 12.8%, up from 4.6% in February 2021

Among the 20 metro areas, Miami again had the highest year-over-year increase in single-family rents in February 2022 at 39.5%, another sizable gain from its February 2021 growth rate of 3%. Orlando and Phoenix logged the second- and third-highest gains at 22.2% and 18.9% respectively, reflecting an influx of Americans migrating to Sun Belt states. Meanwhile, the Washington, D.C. area and St. Louis recorded the lowest annual rent price growth, both at 6.5% in February.

Differences in rent growth by property type emerged after the pandemic, as renters desired standalone properties in lower-density areas. This trend drove an uptick in rent growth for detached rentals in 2021, while the gains for attached rentals was more moderate. However, as rental inventory remains slim, the gap between attached and detached rental growth started to close last fall. In February of 2022, attached rental property prices grew by 12.9% year over year, compared to the 12.8% increase recorded for detached homes. This is the closest that attached and detached growth rates have been since December 2019.

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