Single-family rent growth tapers off: CoreLogic

U.S. single-family rental (SFR) homes posted rent price growth of 3% during the year ending in April 2024, according to CoreLogic data released Tuesday. That was down from an annualized gain of 3.4% in March.

The California-based real estate analytics company reported that the annualized gain was in line with the pricing growth recorded by the SFR segment during much of the past year. But these gains are also being driven entirely by detached properties. Attached properties, including condominiums, posted a yearly rent-price decrease for a second straight month, backtracking by 0.5% in April.

“Annual single-family rent growth has solidified over the past few months, increasing at roughly the long-term trend,” CoreLogic principal economist Molly Boesel said in a statement. “However, monthly single-family rent growth gained momentum and was higher than usual for April. At the current rate, rents are poised to grow by roughly 3% through the end of 2024.”

CoreLogic noted that depreciation in the attached-rental segment is mainly being driven by a subset of markets in Florida, along with other Sun Belt hubs such as Austin, New Orleans and Phoenix.

“As multifamily apartments are being completed, some markets are gaining increased rental supply, which competes with the attached segment of the single-family rental market,“ the report explained. “These trends could signify that even after the pandemic, Americans who rent want more personal space and are willing to pay more for it if their budgets allow. Also, the high cost of homeownership is likely causing some households to stay in single-family rentals.“

Across the 20 metro areas tracked by CoreLogic, the SFR data for March showed that Seattle led the way for annualized rent growth at 6.3%, followed by New York City (5.3%) and Boston (5.2%).

St. Louis — which happens to be the least expensive of the metros tracked by CoreLogic — jumped to the top of the list in April with a year-over-year increase of 6.3%. The median monthly rent payment in St. Louis is $1,616, while the other four rental markets in the top five for yearly rent gains in April (New York, Boston, Seattle and San Francisco) each have median rents in excess of $3,200 per month.

CoreLogic’s monthly SFR report analyzes rental properties across four pricing tiers. Lower-priced properties are those that cost 75% or less than the regional median rent. Lower-middle-priced properties range from 75% to 100% of the regional median, followed by higher-middle-priced homes (100% to 125%) and higher-priced homes (125% or more).

The April data showed that in comparison to March, yearly rent gains slowed across three of four tiers. The lower-middle-priced tier led the way with annualized growth of 3.5%. The lower-priced tier had the slowest growth during this period at 3.1%.