Rent for single-family homes broke records in February this year for the highest pace of growth in four years. Now, rent growth is at its lowest in 10 years. Rent prices increased 1.7% annually in May on a national level, according to CNBC. There are 12 million single-family rental homes in the U.S., making up 35% of all rental housing. The weak May numbers are nearly half of the growth seen last year when rent grew by 2.5% nationally. This change has mainly influenced higher-priced rentals, as lower-priced homes continued to see rents raised.
Rent growth also varies widely by city. Phoenix is still seeing strong rent growth at 6% year-over-year. Tucson saw the second highest at 3.5%, followed by Charlotte, North Carolina at 2.9%. Honolulu, whose economy relies heavily on the tourism market, was the only major city to see rents decline annually, down 0.4%.
Rent demand is based on employment, so cities that have lost more jobs are seeing rents slow the most. Detroit, which was hit hard by the coronavirus, saw a nearly 20% drop in employment, that made local rent price growth there stagnant in May, according to CoreLogic. On the other hand, Phoenix’s employment decline was much less precipitous.
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