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Lawler: Single-Family Rent Trends

CR Note: Last week, I posted a brief note from housing economist Tom Lawler: Lawler: Is the “Owners’ Equivalent Rent” Index Set to Accelerate Sharply?

Here is some more information from Lawler:

Two of the largest institutional holders of single-family rental properties recently reported that demand for single-family rentals has rebounded strongly over the past several quarters, and both reported an acceleration in rental increases.

Rent Increase, “Same-Store” Homes
Invitation Homes
  Renewals New Leases Blended
Q1/2020 4.2% 1.8% 3.4%
Q2/2020 3.5% 2.7% 3.3%
Q3/2020 3.3% 5.5% 4.0%
Q4/2020 3.8% 6.9% 4.9%
Q1/2021 4.4% 7.9% 5.4%
Apr-21 5.5% 10.8% 7.0%
American Homes 4 Rent
  Renewals New Leases Blended
Q1/2020 4.6% 3.4% 4.2%
Q2/2020 1.3% 4.4% 2.4%
Q3/2020 1.1% 6.0% 2.8%
Q4/2020 4.3% 7.6% 5.5%
Q1/2021 5.1% 10.0% 6.9%
Apr-21   11.0%  

Invitation Homes owns about 80,330 single-family homes, while American Homes 4 Rent owns about 51,984 single-family homes.

While apartment rents in many large cities fell sharply following the pandemic (though rents have rebounded somewhat recently), the single-family rental market held up much better, as did the apartment rental markets in less-densely-populated (and less expensive) cities.

A recent report from CoreLogic also shows this to be the case. CoreLogic’s Single-Family Rent Index (SFRI), based on repeat-rent analysis of the same rental properties, increased by 4.3% YOY in March, compared to a recent YOY low of 1.4% in June. The SFRI for the “high-price” tier showed a 5.0% YOY gain in March, while the “low-price” tier showed just a 3.2% YOY increase. In terms of property type, the SFRI for SF detached properties increased by 6.9% YOY gain in March (a record high), while the SFRI for SF attached properties showed just a 1.3% YOY rise.

Here is a chart from the report, which is available here: U.S. Single-Family Rents Up 4.3% Year Over Year in March.

CoreLogic RentClick on graph for larger image.

From CoreLogic:

Rent prices for the low-end tier, increased 3.2% year over year in March 2021, down from 3.8% in March 2020. Meanwhile, higher-priced rentals increased 5% in March 2021, up from a gain of 2.8% in March 2020. This was the fastest increase in higher-price rents since August 2006.

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