The lack of housing inventory for home buyers is having a big impact on the rental market, as more Americans want to renew leases to buy themselves more time to search for their home.
Rents for single-family homes rose 9.3% nationwide compared to August last year, according to a new report released Tuesday by property data company CoreLogic. By comparison, in August 2020, rents increased by only 2.2% on an annual basis.
Significantly, August 2020 marked the first time since April that every major metropolitan area included in the report has seen rent increases.
“Consumers tend to relocate as they personally work and return to school,” Molly Boesel, chief economist at Coralgic, said in the report. “Ongoing priorities for more accommodation – and thinner inventory for sale – are forcing buyers to rent, putting significant pressure on the single-family rental market.”
Boston was the last major metropolitan area to see rents turn positive after a 14-month fall. The move was a reflection of the start of the school year, when college students and teachers largely returned to the city as private classes resumed with the current semester at most educational institutions. (Boston, a city of less than 700,000 people, has more than 70 colleges and universities.)
But Boston’s 1.5% rent increase is much higher than the country’s highest. That honor, instead, went to Miami, where rents have risen more than 21% in the past year. And for the first time in almost three years, Phoenix has not experienced the largest rent increase in the country.
Air travel has improved since the rollout of the COVID-19 vaccine across the country, and the resumption of cruises is consistent with a return to Miami’s increasing fare.
Phoenix had the second-highest rent growth rate nationwide at 19.2%, followed by Las Vegas at 15.4%. The top five includes two Texas metro areas: Austin and Dallas.
Rent increases have encouraged real-estate investment trusts that focus on single-family rents, such as Invitational Homes INVH,
And American Home 4 Rent AMH,
Invitation and American Homes 4 Rent have increased their shares by more than 30% in 2021, compared to the S&P 500 SPX’s overall 20% increase,
Over the same period.