Single-family rent prices in July stabilized for the first time since February, according to a new report from global analytics firm CoreLogic.
While still down from a 2.9% year over year increase in July 2019, the latest Single-Family Rent Index, which analyzes single-family rent price changes nationally and across 80 metropolitan areas, shows that single-family rent prices across the country were up 1.7% year over year in July.
That marks a significant improvement from February 2020, when skyrocketing unemployment across the country left landlords with no choice but to lower rents in an effort to keep their tenants. As the situation unfolded, rent increases began to slow sharply from an average of 2.9% in the first quarter of 2020 to 1.7% in May and 1.4% in June, when national rent growth reached its slowest pace in 10 years.
According to the report, rent price growth has been closely aligned with unemployment numbers across the country, as job loss continues to put downward pressure on rents.
“Increases in single-family rent prices slowed dramatically this spring as the nation began to face the economic impact of the pandemic,” said CoreLogic Principal Economist Molly Boesel in the report. “As job losses slowed in July, rent growth steadied. “However, increases in rents should remain sluggish until the economy starts to experience employment gains.”
Rent price increases in lower-priced rentals — up 2.6% but down from 3.7% in July 2019 — far exceeded growth in other price levels in July, presumably as many lower-wage workers were called back to their jobs.
Meanwhile, lower-middle priced rentals were up 1.8% but down from 3.7% growth in July 2019; higher-middle priced rentals were up 1.7%, down from 2.8% in July 2019; and higher-priced rentals were up 1.4%, down from 2.5% in July 2019.
While rents slackened across the country, most metro areas maintained an increase in rents compared to this time last year. Among the 20 metro areas, Phoenix had the highest year-over-year increase in single-family rents in July 2020 at 4.7%, while Honolulu — which continues to adhere to stricter lockdowns and shelter-in-place ordinances — saw the most significant decline at 1.3%.
In Chicago, July single-family rent prices increased slightly, up 0.3% year over year.
Despite the reopening of many local economies, the impacts of the pandemic are continuing to weigh on the rental market, and according to the report, we may see further disruption of local rental markets moving forward, especially if we see further resurgence of the virus itself.