Single-family rents are off to the races so far in 2022, with the sector’s rent growth up 12.6% in January — the largest annual jump in more than 16 years, according to CoreLogic.
January’s rent growth dwarfed that of the same month in recent years, more than tripling last year’s increase of 3.9% and quadrupling the gain from January 2020. Rent growth continues to be boosted by inventory shortages in both the purchase and rental markets, as low supply coupled with strong demand have fueled soaring house prices that are keeping potential buyers out of the market and driving up interest in single-family rental homes.
“Single-family rent (SFR) growth extended its record-breaking price growth streak to 10 consecutive months in January,” said Molly Boesel, principal economist at CoreLogic. “Rents increased across the country, and the gains were highest in the Sun Belt, which also had strong population growth last year.”
Miami had the highest year-over-year increase among major metros tracked by CoreLogic, with rents in Florida’s largest city up a staggering 38.6%; for comparison, Miami’s rent growth rate in January 2021 was 2.2%. Other Sun Belt cities with big year-over-year rent bumps include Orlando, at 19.9%, and Phoenix, at 18.9%.
Rent growth was also broad-based by price tier, with rents for lower-priced SFR properties up 12% yearly. Rents for lower-middle priced properties saw a 13.3% annual increase, while rents for higher-middle priced properties were up 13.4%. Rents in the highest price tier were up 12.2%. For both the lower-priced and higher-priced tiers, January’s annual price gains were record highs.
Following a trend that has lasted through the pandemic, renters continue gravitating toward detached rentals in lower-density areas. However, with the supply of single-family rentals still low, the gap between the two property types began to close last fall. In January, rents for detached properties 12.2% annually, compared to 12.2% for attached units — the closest the two growth rates have been since March last year.
