Demand for single-family rental homes is so strong that rents have nowhere to go but up, and they are rising at an increasingly fast pace. 

CoreLogic’s latest data shows that single-family rents rose 10.9% in October, compared to last year. It is almost three times as high as the October 2020 3.2% annual growth. This is because there’s too much demand and not enough supply. These homes have vacancy rates at their lowest level in 25 years. This is because the for-sale market has become more competitive and expensive, driving more buyers to rent.  

Molly Boesel principal economist at CoreLogic stated, “Single family rent growth reached its sixth consecutive record high October 2021,” 

Rent growth is high at all price levels, but it’s strongest in the most costly rentals. 

·       Lower-priced7.5% or less that the regional median

·       Lower-middle priced(75 % to 100% of regional median) 10.1%, an increase from 2.8% October 2020

·       Higher-middle priced(100% to 125% Regional Median): 11.3%. Up from 3% October 2020

·       Higher-priced(12.55% or more over the regional median): 11.4% (up from 3.5% October 2020 

Rent growth was highest in Miami, which saw rents rise 29.7% annually. This was followed closely by Phoenix, at 19.3%, and Las Vegas, at 16.5%. Chicago’s October annual growth was 4.2%, which is nearly twice its pre-pandemic rate. 

Investors continue to flood the market with cash, purchasing lower-priced properties and renting them out. This has a negative impact on the supply of homes, especially for those who are just starting out. 

“Owners are being driven out of certain areas by investors at certain prices in specific markets. It’s very significant in Phoenix. It is important in Charlotte as well as in Atlanta. “This ranges from 250 to 475 thousand dollars,” John Burns, CEO at John Burns Real Estate Consulting, said. 

Investors and builders both are investing more in the market for build-for rent now. According to the National Association of Home Builders, housing starts reached record highs in the third quarter of the year.

Although rents will be less expensive next year due to increased supply, there could still be more demand, particularly if the new Omicron version drives people away from major cities into suburbs. These single-family rentals are very common in these outlying neighborhoods.