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?.
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.
Click 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.