Single-family rent growth flattened out in March -- an unsurprising consequence of the ongoing COVID-19 pandemic. It was the first time rent acceleration has slowed this year.
That doesn’t mean rents went down, though. According to the latest Single-Family Rent Index from property data firm CoreLogic, on a year-over-year basis, the national rent was still up 3% for the month of March. On the lower-priced end of the spectrum, the uptick was even higher.
Low-priced rentals see rent prices surge
For properties with rents less than 75% of the regional median, rents increased 3.9% over April 2019. That’s up from the 3.7% uptick seen in 2019 -- a small but notable bump in light of the current health crisis.
On higher-end properties -- or those with rents more than 125% the local median -- rent growth was much more subdued. Properties in this range saw a mere 2.7% jump over the year.
The data reflects the struggle that today’s renters are going through in light of COVID-19. Data shows this cohort has been hit significantly harder than homeowners, and the wave of layoffs throughout the hospitality sector likely has many fleeing to lower-priced properties.
Here’s how Molly Boesel, principal economist at CoreLogic, explains it: “COVID-19 has had varied effects across price tiers,” she said. “Lower-priced rentals experienced a slight uptick in March as renters pursued more affordable rental options.”
Phoenix for the win
Though lower-priced rentals are seeing more growth than those on the higher end, they’re not claiming near the spikes seen in America’s hottest markets.
In Phoenix, for example, rents rose a whopping 6.8% in March. It was the 16th straight month the city has taken the top spot for single-family rent growth.
According to CoreLogic, Phoenix’s low levels of construction have helped spur rent growth. The city also hasn’t experienced the unemployment surge that many others have seen in recent months.
“Metro areas with limited new construction, low rental vacancies, and strong local economies that attract new employees tend to have stronger rent growth,” the report reads. “The Phoenix job market has remained strong throughout the early weeks of the pandemic, experiencing an annual employment growth of 2.7%, compared with the national employment growth average of 0.8%, which allowed rent price growth to remain at the top of the nation in March 2020.”
Seattle wasn’t far behind Phoenix with its 6.2% spike, while Tucson saw rents rise 5.3% and Las Vegas experienced a 4% jump. Boston and Washington, D.C., were the only cities not in the West or Southwest to make the top 10 list for rent growth.