If 2020 was indeed the year of leaving the city for more space in the suburbs and exurbs, it shouldn’t be a surprise that single-family rent growth surged at the year.
In December, US single-family rent growth increased 3.8% year-over-year. That was an improvement over the 1.4% reported in June and 2.9% in December 2019, according to the CoreLogic Single-Family Rent Index (SFRI).
Rent growth was most substantial in higher-priced rentals, defined as properties with rent prices greater than 125% of a region’s median rent. In that category, rents increased 4.3% in December 2020, up from the 2.4%-increase posted in December 2019.
The pandemic’s impact of lower-wage workers showed up in rent growth numbers for low-end tier homes, defined as properties with rent prices less than 75% of the regional median. Rents in those homes rose 3.3% YOY in December 2020, a decline from the 3.5% posted in December 2019.
The narrative of people moving from the coasts to the Sunbelt in 2020 also showed up in CoreLogic’s December numbers. Out of the 20 large metropolitan areas, Phoenix had the highest YOY rent growth at 10.7%. It was followed by Tucson, Az. (+9.5%), and Charlotte (+7.1%). The three metros with the largest annual declines were Boston (-7.2%), Chicago (-.9%) and Honolulu (-0.1%).
In all, eight of CoreLogic’s top 20 metros posted lower rent growth than a year ago. Boston had the largest deceleration, with rent coming in 11 percentage points lower than in December 2019. CoreLogic’s attributes that to many students choosing to not return to the city, which is home to 35 colleges and universities.
Chicago, Honolulu, Miami, Philadelphia, Los Angeles, Seattle and Orlando also posted lower rent growth than a year ago. On the other hand, Phoenix, Tucson, Charlotte, Detroit, Las Vegas, Atlanta, Dallas, Austin, Houston, San Diego, St. Louis and Washington DC posted higher rent growth than a year ago.
CoreLogic says rent prices will likely have mixed growth rates across the nation as states begin managing the administration of vaccines and mitigating continued unemployment concerns.
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