The latest research for single-family rentals in the US shows that the sector has experienced record growth over the last year. Rents increased by 11.5% in the year to November 2011 with properties at the higher end of the price tier seeing even bigger growth. Metros with the strongest hikes in rental rates included Miami, Phoenix, Las Vegas and Orlando.
CoreLogic recently released its latest Single-Family Rent Index. The report includes figures for November last year and shows a 11.5% increase in rental rates in the US in 12 months. The uptick triples the 3.8% rise seen in November 2020.
“Improvements in the economy and job market have helped push single-family rent growth to record levels,” said Molly Boesel, Principal Economist at CoreLogic. However, she highlighted the problems this phenomenon causes for affordability, particularly at the lower end of the market.
Tier differences in single-family rentals in the US
CoreLogic examines rental rates in four different price tiers for single-family properties in its research. The November report found that the highest rise was in the higher-middle priced homes (those whose rental rates are 100% to 125% higher than the regional average). These properties experienced a 12% rise in rent.
Lower-middle priced and higher-priced properties showed similarly high increases with rents going up by 11.3% and 11.7%, respectively. All figures are almost or over triple the rates charged in November 2020.
Highest rent hikes in Miami
CoreLogic research looked at 20 metro areas in the US and topping the table with the highest single-family rentals in the US was Miami. In this metro, rates skyrocketed by 33% in the year to November, taking the average monthly rent to US$2,345.
Phoenix and Las Vegas took second and third places with upticks of 19.4% and 16.7%, respectively. Tying for fourth position were Austin and Orlando, both with increases of 15.9% in monthly rental rates.
For CoreLogic, these major metros continue to be focal points for rental growth monthly and yearly as unemployment drops.
At the other end of the scale, Washington posted the lowest annual growth in single-family rentals in the US with a 5.4% increase. Honolulu registered the highest rates in the country with an average of US$3,292 a month, closely followed by Los Angeles where single-family properties rent for US$3,188.