US single-family rental properties posted 2% rental price growth during the year ending September 2024, according to a recent report. CoreLogic report. That was down from a year-on-year growth of 2.4% in August.
The real estate data and solutions company reported that the annual gain was well below the pre-pandemic single family occupancy growth rate (SFR) of 3.5%. Reduced leases – or detached properties – saw rent growth fall to 2%. This marked two consecutive months of reduced rental prices after annual increases of 2.6% in July and 2.3% in August.
“Annual single-family rent growth fell in September to the lowest level in four years, and monthly rent growth posted a second month of seasonally weak growth, making it clear that single-family rent growth is slowing,” Molly Boesel, CoreLogic’s chief economist, said in a statement.
“Although almost one-third of metros showed strong rent growth compared to last year, many metros showed a decrease in rent compared to the previous report. While the rent drop will be welcome news for tenants, the increase from 2020 is still 32%.
CoreLogic also noted that the SFR price drop occurred in several markets in Texas, California and Florida.
Among the 20 metro areas tracked by CoreLogic, Detroit led the way with the highest annual SFR growth at 5.2%, followed by Seattle (5%) and New York (4.9%). In August, Seattle led the pack (5.8%), followed by New York (5.5%) and Washington, DC (5.5%).
Detroit ($1,764) posted the second lowest monthly average rent after Philadelphia ($1,656). Three of the top five places for annual rent price growth in September (Seattle, New York and Washington, DC) had median prices above $3,000. Chicago (ranked 4th) had an average rent of $2,663.
CoreLogic’s monthly SFR index analyzes rental prices across four price categories. Low-priced rentals are those priced below the county median. Middle class rents are usually between 75% and 100% of the regional median. Middle-class rents range from 100% to 125% of the county median, with high-end rents ranging from more than 125% of the county median. CoreLogic surveys properties in nearly 100 US metros – including 43 that cover all four categories.
The report indicated that the growth in the price of high-end rental properties, caused by luxury properties, is exceeding the lowest prices. This is a sign that some employers are taking advantage of the rising economic breathing room, explains CoreLogic.
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