Single-family rent prices are surging at a record rate, led by homes in Sun Belt cities like Miami and Phoenix

Rent a house in Corona Del Mar California
Scott Mlyn | CNBC

Single-family rentals are in high demand. This has driven prices up to new records. Americans want bigger homes that have more outdoor space.

CoreLogic’s January report shows that single-family rental rates increased by 12.6% in January. This compares with a 3.9% increase in January 2021.

All major markets saw an increase, however cities in the Sun Belt experienced truly remarkable numbers.

One-family rents in Miami rose by 38.6%, an increase of just 2% from January. With gains of 19.9% & 18.9% respectively, Orlando, Fla. and Phoenix followed suit as Americans continue to migrate to warmer areas of the country. The Washington, D.C., area saw the lowest annual growth in rent prices — but they were still up 5.6%.

Molly Boesel principal economist at CoreLogic stated, “Single family-rent growth increased its record-breaking price rise streak to 10 consecutive monthly months in January.”

Single-family rental demand is strong because of the tough market for homebuyers. Home prices are up 19% over a previous year, and the number of available listings is still historic low. This means that homes listed on the market often sell within weeks or days.

The report shows that rent growth is most strong in the middle segment of the market. CoreLogic examined four levels of rent prices, and discovered that the areas with the lowest growth were the most affected.

  • Lower-priced(75%) or lower than the regional median: up to 12%, compared to 3% in Jan 2021
  • Lower-middle priced75% to 100% Regional Median: 13.3% up from 3.2% in Jan 2021
  • Higher-middle priced(100% to 125% regional median): Up 13.4% from 3.6% January 2021
  • Higher-priced(125% or higher than the regional median): Up 12.2% from 4.5% January 2021

Although apartment rents are rising still, they are decreasing as there is less supply available to satisfy demand.

However, this isn’t true for single-family rentals. The availability of inventory for single-family rental projects is decreasing despite more investors and builders choosing build-for rent. Building has been hampered due to disruptions in supply chains and a shortage in labor.

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