Single-Family Rents Up 20% in Miami Since Last Year
That’s on top of 27 percent increase the previous year
By Chava Gourarie November 17, 2022 12:12 am
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With the housing market handicapped by high prices and high mortgage rates, institutional investors are turning to single-family rentals to fill the gap for potential homeowners.
And that continues to drive up rents.
Nationally, rents for single-family homes were up 10.1 percent year-over-year in September, down from a peak of 13.9 percent yearly growth in April, according to data from CoreLogic.
The Miami metro led the nation with a 20.1 percent increase in single-family rents compared with 2021 — on top of a 27 percent increase the previous year. That brought the average monthly rent to $2,620 per month, per CoreLogic. Miami also leads the nation in the increase in income required to purchase a home, up 63.7 percent between October 2021 and 2022, according to data from Redfin — helping push potential homebuyers into rentals instead.
Orlando came in second, rising 18.3 percent to an average cost of $2,085 per month. In contrast to Miami, that increase was higher than the previous year, when single-family rents rose roughly 12 percent. Unsurprisingly, Orlando also saw housing prices grow increasingly out of reach, as the average income required to pay a mortgage in the Central Florida city rose by 56.7 percent year-over-year in October. The national average was 45.6 percent.
In Florida, it now takes more than $100,000 in annual income to own a home in Orlando, Fort Lauderdale, West Palm Beach, Tampa and, of course, Miami — none of which was true last year.
However, even the current increase in rents is a slowdown compared with earlier this year, before inflation and interest rates began their steady climb. In March, single-family rents in Miami were up 39 percent year-over-year, according to a previous CoreLogic report.
That hasn’t stopped institutional buyers from jumping on board. Just this week, J.P. Morgan Global Alternatives teamed up with build-to-rent investor Haven Realty Capital to pour $1 billion into build-to-rent communities. In fact, with fewer homebuyers in the market, construction companies are turning to institutional investors to buy their single-family stock in bulk, the Wall Street Journal reported earlier this year.
Chava Gourarie can be reached at cgourarie@commercialobserver.com
