With home prices reaching new heights, demand for single-family rentals is booming, pushing rental prices up with it. Rent for single-family homes increased from 2.4% in April 2020 to 5.2% in April 2021, according to data from CoreLogic. CNBC says it's the largest gain in 15 years. But for detached single-family rentals, rents are up an even higher 7.9% from one year ago. Both Millennials and Baby Boomers prefer living in detached single-family homes, according to a CoreLogic study. And as more Millennials enter the typical first-time buyer age yet continue to juggle student debt and rising home prices, detached single-family homes could be the answer.
“Single-family rent growth showed a strong rebound in April 2021 with all price tiers back above their pre-pandemic rent growth rate,” said Molly Boesel, principal economist at CoreLogic. “While rent growth slowed last April at the start of the pandemic, the rate of rent growth this April was running above pre-pandemic levels even when compared with 2019 and shows no signs of diminishing.”
The rent gains are across all price categories, even low end, which exceeded pre-pandemic rent increases for the first time. By category, the gains are as follows:
· Lower priced (75% or less than the regional median): 3.9%, up from 3.2% in April 2020
· Lower-middle priced (75% to 100% of the regional median): 4.8%, up from 2.5% in April 2020
· Higher-middle priced (100% to 125% of the regional median): 5.1%, up from 2.3% in April 2020
· Higher priced (125% or more than the regional median): 6.1%, up from 2.2% in April 2020