Lawler: Single-Family Rent Trends

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?. 
Here is some more information from Lawler:

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" HomesInvitation Homes RenewalsNew LeasesBlended Q1/20204.2%1.8%3.4% Q2/20203.5%2.7%3.3% Q3/20203.3%5.5%4.0% Q4/20203.8%6.9%4.9% Q1/20214.4%7.9%5.4% Apr-215.5%10.8%7.0%American Homes 4 Rent RenewalsNew LeasesBlended Q1/20204.6%3.4%4.2% Q2/20201.3%4.4%2.4% Q3/20201.1%6.0%2.8% Q4/20204.3%7.6%5.5% Q1/20215.1%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.


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