Back in February, just before the coronavirus hit the U.S. economy with a vengeance, rent growth for single-family homes had hit its highest pace in four years. Barely three months later, that growth plummeted to a decade low.
Single-family rents grew just 1.7% annually in May on a national level, according to CoreLogic. That’s the slowest growth rate in nearly a decade and a little more than half the growth these 12 million rental homes were seeing the year before. Single-family rentals make up 35% of all rental housing in the U.S., and these homes are valued at more than $2.3 trillion.
“Single-family rent growth slowed abruptly in May as the nation felt the full impact of the economic crisis caused by the pandemic,” said Molly Boesel, principal economist at CoreLogic. “Some metro areas, especially those that depend on tourism, were hit hardest by job losses. With unemployment rates predicted to remain high through the end of the year, we can expect to see further easing in rent growth as the economy struggles this year.”
The slowdown in rent growth was most severe at the high end of the rental market, while lower-priced rentals saw rents going up more markedly. That is likely because the demand for high-end rentals has dropped more dramatically than demand for lower-priced properties.
Suraj Shrestha is an associate at Harborside Partners. He has been taking the lead role on research projects; to develop and implement online marketing strategies for search engine optimization and social media marketing. He is one of the core parts for helping to grow business revenue and the company’s online presence.