The rental apartment market is currently experiencing downward pressure on rents, while the single-family rental market is seeing a solid pace of rent increases. Market analyses by Hunter Housing Economics reveal that there is a growing level of pent-up demand for built-for-rent single-family housing. New data released shows that single-family rent growth regained strength in February, with the highest annual appreciation since April 2023, according to Molly Boesel, principal economist of CoreLogic®. The latest Single-Family Rent Index (SFRI) from CoreLogic analyzes single-family rent price changes nationally and across major metropolitan areas, showing an increase in rent prices.
On a regional level, February’s annual rental cost increases could indicate a return to larger, more expensive coastal metros as Americans slowly migrate back. New York had the nation’s highest year-over-year rental price gain, followed by Seattle and Boston, with median rent prices exceeding $3,200 for a three-bedroom property compared to the national median of about $2,100. In contrast, in February 2023, less expensive metros such as St. Louis, Charlotte, and Orlando led the country for rent growth. Monthly rent growth also increased in February, including the lower-priced properties which had the smallest annual rent growth.
To provide a detailed view of single-family rental prices across different market segments, CoreLogic examines four tiers of rental prices and two property-type tiers. National single-family rent growth across these tiers showed increases in lower-priced, lower-middle priced, higher-middle priced, and higher-priced properties. Additionally, attached single-family rental prices grew by 2.9% year over year in February, compared to a 3.7% increase for detached rentals. Among the 20 metros analyzed, New York, Seattle, and Boston posted the highest year-over-year increase in single-family rents in February 2024.
Research by Hunter Housing Economics indicates that demographic groups driving single-family rental demand are forming new households at a rapid rate, with incomes growing faster than the general population. This trend is expected to support further rent increases as the pace of single-family rental construction declines, creating pent-up demand. The data suggests a continued rise in single-family rent prices from 2024 to 2027. The increasing demand and limited supply of single-family rental properties are contributing to the rise in rent prices, especially in high-demand coastal areas.
Overall, the single-family rental market is experiencing a resurgence in rent growth, with an increasing level of pent-up demand for built-for-rent single-family housing. The data from CoreLogic’s latest SFRI shows that rent prices are on the rise, particularly in coastal metros like New York, Seattle, and Boston. With demographic groups driving rental demand forming new households at a fast rate and incomes increasing, rent prices are expected to continue to rise over the coming years. As construction of single-family rental properties declines, pent-up demand is projected to further support rent increases in the market.