Single-family rents continue their climb; lower-priced properties see biggest jump

Rents race to the top

If you’re renting a house in hopes of saving money, you might want to re-think that strategy. According to a new report, single-family rents are up significantly over the year –particularly on lower-end properties.

Rents just keep rising

According to the latest CoreLogic Single-Family Rent Index, rents on single-family properties are up 2.8 percent over the year. On lower-priced properties (those with a rent lower than 75 percent of the regional median), rents have risen nearly 4 percent in the same period.

According to Molly Boesel, CoreLogic’s principal economist, growing demand for entry-level homes is to blame.

“Single-family rent price growth remained solid in January,” Boesel said. “High demand and low supply for entry-level properties drove lower-priced rentals to have faster price growth than higher-priced rentals, revealing affordability pressures in this segment of the rental market.”

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Las Vegas, in particular, has seen rents skyrocket, with single-family rent costs jumping 4.8 percent since January 2017. Orlando and Phoenix also clocked in with over-4 percent gains in rent over the year.

The reason for these regional increases? According to CoreLogic, it’s strong economic growth, low levels of new construction and increasing employment opportunities.

“Orlando and Phoenix both experienced 4.5 percent year-over-year rent growth in January 2018, driven by employment growth of 3.6 percent and 2.7 percent, respectively, year over year,” CoreLogic reported. “This is compared with the national employment growth average of 1.4 percent, according to data from the United States Bureau of Labor Statistics.”

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Just one major metro area saw single-family rents decline in the last 12 months. Honolulu’s rents dropped 1.1 percent since last January.

Get today’s mortgage rates

With rents continuing their upward climb, it might be time to consider buying or building a home. Shop around and see what mortgage rates you qualify for today.