Key Highlights
- Single-family rent prices increased +3.1% in October, according to the latest CoreLogic Single-Family Rent Index
- Two exceptions were Honolulu and Boston
- Rent prices grew faster than pre-pandemic
For the first time since the COVID pandemic blew apart the world, rent prices increased +3.1% nationwide, with the exceptions of Honolulu and Boston, in October, according to CoreLogic.
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This +3.1% represents a nationwide rent price growth rate faster than the rent price growth rate pre-pandemic. Last year in October, the rate of rent price growth was 2.9% for a single-family home.
How could this be happening in the midst of +11M renters, according to Moody’s Analytics, being unable to pay their rent? CoreLogic points to flourishing job markets and the high number of relocating professionals.
Which cities benefitted the most year-over-year rent growth from these flourishing job markets and relocating professionals despite the country having -6% fewer jobs this past October than October 2019? Take a look:
Phoenix +8.9% – highest y/y rent growth since late 2018
Tucson +7.6%
Charlotte +5.2%
10 of the 20 metro areas included in CoreLogic’s Single-Family Rent Index for October 2020 experienced rent price increases. Boston and Honolulu experienced the largest annual rent price declines at -4.1% and Honolulu at 0.4%.
CoreLogic’s Single-Family Rent Index indicated that low and high priced rentals roughly followed the same trajectory. This trajectory was dissimilar from the past 6 years in which rent price growth in low-priced rentals was much faster than in high priced rentals. The reason? The pandemic recession has impacted lower-wage workers much more than higher-wage workers.
Some are concerned that this rent price increase in October may thwart affordability for many renters, particularly the 59% of all renters who relocated to the suburbs and pushed the overall single-family home rental occupancy rate to 97% during Q3 2020.
David Howard, executive director of the National Home Rental Council, said that even with this increase of +3.1% in October, single-family rentals remained more affordable than single-family home prices in Q3. CoreLogic confirmed Howard’s statement by saying that median single-family home prices increased +7.9% during this same period.
Thanks to CoreLogic, National Home Rental Council and InmanNews.
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