Demand for rentals in the US is increasing at an alarming pace. Single-family rentals rose 10.9% in October year-over-year, according to a report by CoreLogic. There are simply not enough rental properties available to meet demand. Vacancy rates are at a 25-year low as those priced out of the buyer’s market search for housing.
Rentals in every price range are on the rise. The lower-priced homes that represent 75% or less the regional median rose 9.5%. Lower-middle priced homes that represent 75% to 100% of the regional median are up 10.1%. Higher-middle priced homes representing 100% to 125% of the regional median are up 11.3%, while the highest-priced homes (125%+) advanced 11.4%.
On a regional basis, Miami saw the largest spike with rentals increasing 29.7% in the past year. Phoenix (19.3%) and Las Vegas (16.5%) also experienced notable increases. Thanks to Lori Lightfoot, Chicago experienced the lowest annual growth among larger cities at 4.2%.
The National Association of Home Builders stated that housing starts specifically for rental units reached a high in Q3. However, there is simply not enough available housing to meet the growing demand. Additionally, numerous landlords are also now converting their spaces in desirable areas to Air BnBs and vacation rentals, further diminishing the supply. As remote work becomes prominent in American culture, people are flocking to the suburbs and areas that were not designed to host a growing population.