Single-Family Rents in US Accelerate to 7.5% in June

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Single-family home rental prices in the United States leapt to 7.5 percent in June as the housing market continues to heat up, even while construction is stymied by the pandemic.

Rents for single-family homes grew about 7.3 percent year over year in May as a national housing shortage took some of the blame for pushing up prices, Commercial Observer reported. But rents keep going up — even higher than if they had stayed on their pre-pandemic trends, Bloomberg reported. 

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The largest increases were in the Southwest, with Phoenix single-family home rents increasing by 16.5 percent and Las Vegas up by 12.9 percent, Bloomberg reported. But, some Bruins and Cubs fans might’ve seen their rents go down, as Boston and Chicago were the only two cities to post rent decreases.

Home prices have also been rising, with the median home price increasing 19 percent in April compared to a year earlier, CO reported. Last quarter, home values reached an all-time high median price of $357,900, forcing would-be homeowners into renting, Bloomberg reported.

The single-family home market boomed during the pandemic, especially in Sun Belt states like Florida, where inventory shrunk and median home sales prices skyrocketed. The sector hasn’t slowed down either, with investors pouring money into it. This summer, Toronto-based Tricon Residential purchased 18,000 single-family homes across the Sun Belt region in a $5 billion dollar deal this summer, adding to its already vast 25,000-unit portfolio, CO reported. 

The U.S. housing market may also be short of around 2 million single-family homes — potentially one of the reasons that single-family renters are seeing increased prices, though rent increases are more concentrated in the Southwest rather than being evenly spread across the country. As a result, more people might migrate to less-dense and lower-cost areas, Bloomberg reported. 

It’s possible some companies might follow the same logic and abandon expensive city offices for cheaper ones. State Street Corp.​​, the financial firm best known for commissioning the Fearless Girl statue in the Financial District, announced in May that it was leaving its two New York City offices in favor of a mix of coworking, work from home, and in-person work at the company’s New Jersey and Stamford, Conn., outposts.

Celia Young can be reached at cyoung@commercialobserver.com.