Apartment rental occupancy rates hit an all-time low this year, meanwhile, single-family rental prices have also surged.
According to a new report from CoreLogic, U.S. single-family rent prices rose 3% in September over August.
However, compared to last September, the national rent increase has remained flat.
Phoenix saw the highest year over year rent price increase, 6.7%, while Miami saw the lowest, 1%.
Because there is low rental home inventory, there is a growth of single-family rental prices.
According to CoreLogic, single-family rent prices went up noticeably between 2010 and 2019, as more institutional operators joined the single-family rental space.
September is also the 65th month in a row where low-end rentals spurred national rent growth. Rent prices among this segment, defined as properties with rent prices less than 75% of the regional median, increased 3.8% year over year in September 2019, the same as in September 2018.
Higher-end rentals, which are properties with rent prices more than 125% of a particular region’s median rent, increased 2.9% in September, slightly up from last September’s 2.5%.
Phoenix saw the highest year over year increase for the 10th year in a row, at 6.7%. Phoenix also had an annual employment growth of 2.4%, which is higher than the national employment growth average of 1.4%.
Metro areas with limited new construction, low rental vacancies and strong local economies that attract new employees tend to have stronger rent growth. Hence Phoenix being at the top of the list.
“Vacancy rates have fallen moderately on the national level over the last quarter – with a 0.3% decrease in the third quarter of 2019 compared to a year earlier – and more significantly in select metro areas,” said Molly Boesel, principal economist at CoreLogic. “Of the metros analyzed in the CoreLogic Single-Family Rent Index, Phoenix experienced the largest decrease in vacancy rates at 2.6%, which helped drive its rent growth to the top of the nation in September.”