Weekly Update: Rental Home Supply is Shrinking

CoreLogic Reports Low Rental Inventory Levels are Pushing Rent Prices Up 

“The total number of single-family rental homes jumped 38% from 2010 to 2016, compared with just a 3% rise in multifamily units, according to Capital Economics.” 

(CNBC)

Among the 20 metro areas shown in Table 1, and for the tenth consecutive month, Phoenix had the highest year-over-year increase in single-family rents in September 2019 at 6.7% (compared to September 2018), followed by Las Vegas at 5.8%. Seattle outpaced Tucson, Arizona, as the third-highest metro for rent growth in September with gains of 5.5%, while Miami experienced the lowest rent increases of all analyzed metros at 1%.

Metro areas with limited new construction, low rental vacancies and strong local economies that attract new employees tend to have stronger rent growth. Phoenix experienced high year-over-year rent growth in September, driven by the annual employment growth of 2.4%. This is compared with the national employment growth average of 1.4%, according to data from the United States Bureau of Labor Statistics. Seattle also experienced an elevated annual employment growth of 3.3%, which played a role in its above-average, year-over-year rent increase in September.

“Low rental supply coupled with ongoing demand pushed up rents in September,” said Molly Boesel, principal economist at CoreLogic. “Vacancy rates have fallen moderately on the national level over the last quarter – with a 0.3% decrease in the third quarter of 2019 compared to a year earlier – and more significantly in select metro areas. Of the metros analyzed in the CoreLogic Single-Family Rent Index, Phoenix experienced the largest decrease in vacancy rates at 2.6%, which helped drive its rent growth to the top of the nation in September.”

DATA AND ARTICLE PROVIDED BY CORELOGIC