Single-family rents jump another 3%; is it time to buy a house instead?

Aly J. Yale
The Mortgage Reports contributor

Rents rise again, especially on lower-priced properties

Single-family rents continued their upward climb last month, notching a 3.1 percent jump over a year prior. According to new data, the spike was worse on the lower-priced end of the market.

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Single-family rents get further out of reach

Affordable rentals just got, well, less affordable. According to the latest Single-Family Rent Index from CoreLogic, national rents jumped 3.1 percent over the year.

Lower-tier rental properties (those with rents under 75 percent of the area’s median price) saw the biggest jump, rising 3.6 percent since 2018. Higher-end rentals jumped just 2.9 percent.

Molly Boesel, CoreLogic’s principal economist, explains, “Increases in low-end rent prices have outpaced those on the high end for more than five years as newly-formed households push up demand for entry-level rentals.”

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Phoenix takes the crown once again

The spike was worse in markets like Phoenix, Seattle and Las Vegas. According to CoreLogic, these areas — “metros areas with limited new construction, low rental vacancies and strong local economies that attract new employees” — tend to see more rent increases on the whole.

Phoenix claimed the largest uptick in rents for the 11th straight month, notching a 6.8 percent increase. Seattle came in second at 5.8 percent, while Vegas came in third at 5.4 percent.

Buying a home is cheaper than renting one in these cities

Other cities with big jumps in single-family rents were Tucson, Arizona; Charlotte, North Carolina; Austin, Texas; Los Angeles; Atlanta; Boston; Orlando, Florida; and St. Louis, Missouri.

Miami saw the lowest jumped in single-family rents with just a 1 percent increase.

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Tired of fighting ever-rising rents? Then buy a home instead. Shop around and see what mortgage rates you qualify for today.

Verify your new rate (Jul 12th, 2020)