The lack of housing inventory for home buyers is having major ripple effects in the rental market, as more Americans seek to renew their leases to buy themselves more time for their search.
Rents for single-family homes increased by 9.3% nationwide in the last year as of August, according to a new report released Tuesday morning by property data company CoreLogic. In august 2020, rents increased yearly only 2.2%.
Notably, August marked the first time since April 2020 that every major city included in the report of an increase in rents.
Consumers continue to relocate as they return to in-person work and school, Molly Boesel, principal economist at CoreLogic, said in the report. The current preference towards more living space — and slim inventory for sale — is forcing would-be buyers back into renting, placing significant strain on the single-family rental market. Boston was the last major metropolitan area to turn positive prices after 14 months of declines. The shift was a reflection of the beginning of the school year when college students and faculty returned to the city en masse as in-person classes resumed with the current semester at most educational institutions in person.
But Boston's 1.5% rent growth was far from being the highest in the country. Instead that honor went to Miami, where rents have increased over the past year by more than 21%. It was the first time in almost three years that Phoenix, Ariz. did not display the largest rent growth in the country.
Lauderdale soaring rents are the result of rebound in tourism as air travel resumed and cruises have improved following the rollout of COVID - 19 vaccines nationwide.
Las Vegas had the second highest rent appreciation rate in the country with 19.2%, followed by Phoenix at 15.4. The top five areas in Texas are Austin and Dallas.
The rise in rents has buoyed real estate investment trusts that focus on single-family rental, such as Invitation Homes INVH, and American Homes 4 Rent AMH, Invitation and American Homes 4 Rent, saw their shares increase more than 30% year-to-date compared to the roughly 20% rise in the S&P 500 SPX over the same period.