- Rent prices for single-family homes climbed 6.6% in May, according to real estate data company CoreLogic.
- CoreLogic noted that rental growth rates across the country are much higher than a year ago.
- Several southern cities, such as Phoenix and Las Vegas, have seen particularly large rent increases.
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If it’s been expensive to buy a home, there aren’t many places to hide. The burning rental market is also becoming more and more expensive.
Home rents skyrocketed in the United States in May, according to real estate data company CoreLogic. According to the company’s latest single-family home rental index release on Tuesday, rents for single-family homes rose 6.6% between May 2020 and May 2021, far more than the 1.7% increase in one year over another the previous year.
Rental price growth continues to accelerate, with May’s year-over-year rate exceeding CoreLogic’s 5.3% increase between April 2020 and April 2021. CoreLogic noted that it This was the biggest jump since at least January 2005, and pointed out that due to the hot market for the purchase of houses, “first-time buyers are choosing to remain tenants instead of entering the housing market“.
This is just the latest evidence that the US real estate market is unleashed in a way not seen since the mid-years real estate bubble. This surge in rental prices shows that there is little to no relief for those excluded from the fierce buying market right now.
Southern cities are experiencing particularly high rental growth. Of the 10 U.S. metropolitan areas with the highest year-over-year growth rates, eight are located in the south:
Rents across the price range are skyrocketing, but the prices for the more expensive homes are leading the pack. CoreLogic noted that rents for homes at least 25% above the median price in their area increased 7.9% year over year, compared to only a 4.6% increase for homes equal. or less than 75% of the regional median. This reverses a long-standing trend of faster growth in rents for cheaper homes that persisted from the middle of the last decade to this year.
New data from CoreLogic reinforces the trend of skyrocketing single-family home rents across the country. According to Insider’s Taylor Borden, the reshuffle of people moving during and after the pandemic has helped fuel a rental boom in places like Phoenix, as people return to hard-hit cities like New York and San Francisco, raising rents nationwide.
Read more: Buying a house stinks, but renting is also a real nightmare
Wall Street has also stepped into the game, with institutional investors buying a record $ 77 billion in homes in the past six months. This has led to even more competition in the home buying market as families are now competing with a lot of money for homes. The pressure of this tight market also seems to be having an impact on rentals.
Housing is one of the biggest expenses for many American families. Prices have generally increased in recent months, with consumer price inflation climbing 5.4% year-on-year in June. While this spike came mainly from goods like used cars and trucks which are experiencing huge shortages and excess demand from the pandemic and reopening, though more rigid prices like housing and rent continue to rise. increase, inflation could be more difficult to manage and more prolonged than currently expected.