18 January 2018
National single-family rent prices climbed steadily between 2010 and 2017, as measured by the CoreLogic Single-Family Rent Index (SFRI). However, the Index shows year-over-year rent growth has decelerated slowly since it peaked early last year (Figure 1). In October 2017, single-family rents increased 2.7 percent year over year, a 1.7-percentage point decline since the growth rate hit a high of 4.4 percent in February 2016. The Index measures changes to the cost to rent single-family rental homes, including condominiums, using a repeat-rent analysis to measure the same rental properties over time. Analysis is conducted nationally and for 75 Core Based Statistical Areas (CBSAs).
Using the Index to analyze specific price tiers reveals important differences. Figure 1 shows that the Index’s overall growth in October 2017 was pulled down by the high-end rental market, which is defined as properties with rent prices 125 percent or more of a region’s median rent. Rent prices on higher-priced rental homes increased 2 percent year over year in October 2017, down from a gain of 2.1 percent in October 2016. Rent prices in the low-end market, defined as properties with rents less than 75 percent of the regional median rent, increased 4.2 percent year over year in October 2017, down from a gain of 5.4 percent in October 2016.
Rent growth varies significantly across metro areas. Figure 2 shows the year-over-year change in rent prices for 20 select CBSAs in October 2017. Las Vegas-Henderson-Paradise, Nev., had the highest year-over-year rent growth with an increase of 4.6 percent. Only two CBSAs among this group of 20 showed a decrease in rent prices: Urban Honolulu, Hawaii (-0.3 percent) and Miami-Miami Beach-Kendall, Fla. (-1 percent). The October 2017 results for Houston is notable with rent growth of 1.2 percent from October 2016 to October 2017, the first rent increase in the last 18 months. While rents in Houston are showing some impacts from Hurricane Harvey, markets in Florida continue to show weakening rent growth despite Hurricane Irma. Tampa, Miami and West Palm Beach all showed lower year-over-year increases in rents compared with October 2016: Tampa-St. Petersburg-Clearwater, Fla. (-1.2 percent point), Miami-Miami Beach-Kendall, Fla. (-1.3 percent point) and West Palm Beach-Boca Raton-Delray Beach, Fla. (-2.2 percent point).
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