Despite some lower home prices, the housing market has cooled in many markets, especially those that are most expensive; prompting a rise in demand for rentals.
CoreLogic’s Single-Family Rent Index shows a rise in average rent growth nationwide, to 3% in April 2019 compared to 2.8% in April 2018. But despite rents rising from 2010 to 2019, overall year-over-year rent price increases have slowed since February 2016 when they peaked at 4.1%; and have stabilized over the last year with a monthly average of 3%.
“Slowing price appreciation started to take hold of the home sales market a year ago – according to the CoreLogic Home Price Index. But, that’s not the case for the single-family rental market, which has seen steady rent increases,” said Molly Boesel, principal economist at CoreLogic. “While the housing market is cooling, home prices remain high in some of the nation’s top metros. This may be contributing to the growing rental demand, as many potential buyers are being priced out of the market.”
Low-end rental growth outpacing high-end
Low-end rentals (rent prices less than 75% of the regional median) are still driving overall rent increases (3.6% year-over-year) although this is lower than the annual increase a year earlier (3.8%).
Meanwhile, high-end rentals (rent prices greater than 125% of a region’s median rent) increased 2.5% in April 2019, up from 2.4% in April 2018.
Click to enlarge image
More market update: