Rents posted another double-digit gain in February, rising 13.1% YOY, according to CoreLogic’s Single-Family Rent Index. They are now at their highest level in the history of the index.
The largest price increases were in warm areas of the country as Americans keep moving to Sun Belt states. Miami saw a spike of 39.5% from February 2021, outpacing the second and third places, Orlando (22.2%) and Phoenix (18.9%).
Washington, D.C., and St. Louis had the lowest annual increases, both at 6.5%.
Lower-priced rentals (75% or less than the regional median) saw increases of 12.7%, up from 3% in February 2021. Lower-middle priced rentals (75% to 100%) were up 13.8%, from 3.2% the year prior.
Higher-middle priced rentals (100%-125%) were up 13.9%, from 3.6% from February 2021. Higher-priced rentals (125%) were up 12.8%, from 4.6% the year prior.
CoreLogic notes that a shortage of rentals, as well as the low U.S. unemployment rate, have contributed to the increases.
“Single-family rents rose at more than three times the rate from a year earlier and more than four times the pre-pandemic rate,” said Molly Boesel, principal economist at CoreLogic.
“Strong employment and low supply have pushed single-family rental vacancy rates to low levels and have contributed to the high growth in rents.”
This is in addition to the continuing shortage of homes for sale and sky-high home price appreciation, both of which are pushing some would-be home buyers into the rental market. Redfin reported that the national median monthly mortgage payment for homebuyers rose twice as fast as rents in February, up 34% YOY to $1,910. This is the biggest increase in the company’s records.
“Many potential first-time homebuyers are quickly being priced out of the market by record-high home prices and fast-increasing mortgage rates,” said Redfin Chief Economist Daryl Fairweather.
“They are then faced with two options: rent or move somewhere with a lower cost of living. Those who choose to rent may save money in expensive housing markets in the near term, but long term, they may have to deal with continued rent increases, year after year.”