Rents for single family homes increased 1.7 percent in May, down 2.9 percent since May 2019, according to a recent report by CoreLogic.
The dip in the year-over-year difference was the lowest since July 2010. Molly Boesel, principal economist at CoreLogic, said areas dependent on tourism were hardest hit. Honolulu, which relies heavily on its tourism market, had its single family home rents decline .4 percent. Phoenix had an increase in rent at 6 percent.
“Single-family rent growth slowed abruptly in May as the nation felt the full impact of the economic crisis caused by the pandemic,” Boesel said.
Prior to the pandemic, the national rental price growth had been a stable 3 percent. However, stay-at-home orders implemented in March led to the rental increase to drop to 1.7 percent by May. To compare, the rental price growth in February 2008 had stood at 1.8 percent.
CoreLogic’s report separated single family homes into four tiers by price. The lowest priced tier, usually 75 percent or less than the regional median, showed a 2.8 percent decrease in May. The next tier, 75 percent to 100 percent of the regional media, was down 1.9 percent in May. The second highest tier, 100 to 125 percent of the regional median, was down 1.6 percent, and the highest tier, with rents 125 percent or more than the regional media, was down 1.3 percent in May.
The country’s unemployment rate remained high in May, and whether a region experienced continued job loss affected rental demand and rental prices. Detroit’s rental prices remained the same due to a 19.9 percent decrease in employment as a result of a surge of coronavirus cases. Cities in Florida, Texas and Arizona may see stagnant or declining rental prices if a resurgence of coronavirus cases occur.