Single-Family Posts Largest Rent Increase in 4 Years
However, three metro areas actually saw single-family rental rates drop: Boston, Chicago and St. Louis.
The single-family rental market has seen the biggest rent increases in more than four years, according to CoreLogic. The big driving forces: demand, high-end properties, and the pandemic aftermath.
Rents on single-family properties were up 4.3% year over year in March. That compares to the 3.0% rate in March 2020 and the 1.4% low in June 2020. The data includes condominiums.
In general, rental vacancy rates in 2020 and 2021 were at their lowest levels since at least the late 1990s, according to Census Bureau data. In the first quarter of 2021, that was 6.8%, including houses and apartments. For homeownership housing, the vacancy rate was 0.9%.
The pandemic has had a mix of effects on housing. Many families living in cities and facing prolonged working and learning from home looked to move into large quarters, increasing demand on both rental and sales stock, helping to drive up prices. At the same time, many people who might normally have moved were concerned about the pandemic and stayed put.
Price tiers played an important part in the rent growth. Low-price tier property—rent prices less than 75% of a regional median—were up year over year in March 2021 by 3.2%. For high-price tier property—greater than 125% of regional median prices—rents grew 5%, the fastest increase since August 2006.
Further split property types into detached (free-standing residential buildings) and attached (various types of multi-family) show even bigger splits in rent growth. Detached were up 6.9%. Attached increased just by 1.3%.
There were also big metropolitan differences between March in 2020 and 2021. The cities with the three largest increase rates were Phoenix, Arizona (11.4%), Tucson, Arizona (+10.4%), and Atlanta, Georgia (+8.1%).
Three metro areas actually saw single-family rental rates drop: Boston (-7.7%), Chicago (-2.9%), and St. Louis (-0.6%). Eight of 20 metros examined had slower rent growth in 2021 than in 2020. Boston, in particular, may have been affected by students attending the multiple universities in the area virtually and not staying in rental properties.
Chicago showed how nuanced the effects could be. Detached rental rates increased by 5%, but detached fell by 4.7%, a nearly 10 percentage point swing.