Single-family rents grew 2.4% year over year in April 2020, according to the latest numbers from the CoreLogic Single-Family Rent Index.
That’s down from a growth rate of 3% in March and 2.9% in April 2019. More notably, it’s the lowest growth rate recorded by CoreLogic since November 2010, thanks to the ongoing impact from the persistent COVID-19 outbreak. Income uncertainty and shelter-in-place measures led many renters to extend their current leases rather than seeking new arrangements, suppressing rental demand and slowing rent appreciation.
“As the pandemic-induced recession took hold in April, the single-family rent index posted its lowest growth rate in over nine years,” said Molly Boesel, principal economist at CoreLogic. “While disruptions in the economy affect all parts of the housing market, the impact can often be seen in the rental market sooner than the for-sale market. This means changes in rents can foreshadow changes in home prices.”
Rent prices slowed among all price tiers year over year in April, though lower-priced rentals continued to boost national rent growth. Low-end rent prices (for properties with rents priced under 75% of the regional median) increased 3.1% annually, down from 3.6% in April 2019. Higher priced rentals (more than 125% of the regional median) saw prices increase 2.3%, down from 2.4% in April 2019.
The pandemic’s geography also had a big impact on single-family rents. For example, COVID-19 hotspot Detroit — which saw a 24.5% annual employment decline in April — posted a 0.3% year-over-year rent price gain during the month, down from 3.3% in April 2019.
Compare that to Phoenix, which saw employment fall just 7.6% year over year locally and, consequently, experienced a rent growth slowdown of just 0.7 percentage points. The Arizona city logged a 6.6% increase in single-family rents, highest among the 20 metropolitan areas analyzed by CoreLogic.
Just one metro area — St. Louis — saw an annual decline, with single-family rent prices falling 0.1% year over year.