The lack of housing inventory for home buyers is having major ripple effects in the rental market, as more Americans seek to renew leases to buy themselves more time for their home search.
Rents for single-family homes increased nationwide by 9.3% over the past year as of August, according to a new report released Tuesday by property data company CoreLogic. Comparatively, in August 2020, rents had only increased 2.2% on an annual basis.
Notably, August marked the first time since April 2020 that every major metropolitan area included in the report displayed an increase in rents.
“Consumers continue to relocate as they return to in-person work and school,” Molly Boesel, principal economist at CoreLogic, said in the report. “The ongoing preference toward more living space — and slim for-sale inventory — is forcing would-be buyers back into renting, putting significant strain on the single-family rental market.”
Boston was the last major metropolitan area to see rents turn positive following 14 months of declines. The shift was a reflection of the start of the school year, when college students and faculty returned to the city en masse as in-person classes resumed with the current semester at most educational institutions. (There are more than 70 colleges and universities in Boston, a city of fewer than 700,000 people.)
But Boston’s 1.5% rent growth was a far cry from the highest in the country. That honor, instead, went to Miami, where rents have increased by more than 21% over the past year. And it was the first time in nearly three years that Phoenix did not experience the largest rent growth in the country.
Miami’s surging rents are concurrent with a rebound in tourism as air travel has improved and cruises have resumed following the rollout of COVID-19 vaccines nationwide.
Phoenix did have the second highest rate of rent appreciation nationwide at 19.2%, followed by Las Vegas at 15.4.% Rounding out the top five were two Texas metro areas: Austin and Dallas.
The rise in rents has buoyed real-estate investment trusts that focus on single-family rentals, such as Invitation Homes /zigman2/quotes/204721876/composite INVH +0.85% and American Homes 4 Rent /zigman2/quotes/200033718/composite AMH +0.36% . Invitation and American Homes 4 Rent have seen their shares increase by more than 30% to date in 2021, compared with the roughly 20% rise in the S&P 500 /zigman2/quotes/210599714/realtime SPX +2.07% over that same period.