The latest reports indicate that inflation is currently at a whopping 7.5%. This is a 40-year high and thus is presenting significant challenges for many Americans. Over the past year, one area of the economy that was certainly not spared from inflationary impacts is the single-family home rental market. According to the Corelogic Single-Family Rent Index (SFRI), last year saw an average increase in rent prices for single family homes rise of 7.6%. This equated to a nearly tripling from the 2.6% increase observed in 2020.
Key findings
- As of December 2021: on a monthly basis, single-family rents increased annually by 12% (as compared to 3.9% in December 2020)
- Lower-priced homes (75% or less than the regional median): increased by 11.2%
- Lower-middle priced (75% to 100% of the regional median): increased by 12.4%
- Higher-middle priced (100% to 125% of the regional median): increased by 12.5%
- Higher-priced (125% or more than the regional median): increased by 11.9%
- At the national level, Miami had the highest year-over-year increase in single-family rents in December 2021 at 35.7%
- At the national level, Orlando had the third highest year-over-year increase in single-family rents in December 2021 at 17.9%
Summary
Bolstered by increasing employment and low vacancy rates, rent growth for single-family homes had a record year in 2021. With this said, rents comprise approximately 1/3 of the Consumer Price Index (CPI). Therefore, this rent growth certainly helped fuel the record-level inflation taking place. With this said, most economists are predicting rental price growth to stabilize somewhat while inflation remains elevated for much of the year.
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