When it comes to rent increases, the single-family rental sector continued to blaze through August, according to CRE data and analysis provider Markerr.
The firm has a newly released SFR index comprising historical and current individual listing for more than 300 metropolitan statistical areas (MSAs). “Despite multifamily rent growth showing deceleration in August, single-family rental YoY rent growth was 11.5% in August 2022, up from 10.1% in July 2022,” Markerr wrote. Mean rent was $1,634. The data for this part of the analysis came from the top 100 MSAs ranked by how Markerr measures total population. In December 2020, mean SFR rent was approximately $1425 for a total growth over that period of 14.7%.
There was double-digit rent growth in the Sunbelt and tertiary markets for the second month in a row, while coastal SFR markets saw their first month of double-digit percentage increases. That left only the Rustbelt in single-digital year-over-year increase territory. There were no markets the firm tracks that saw negative SFR rent growth. But for multifamily, 41 markets had negative growth.
The top ten SFR rent growth markets were primarily in tertiary markets.
Looking at the sector by month-over-month rent growth, the US average was 1.5%. The highest were in Knoxville, Tennessee (3.9%); Syracuse, New York (3.8%); Cape Coral, Florida (3.4%); Provo, Utah (3.4%); Dayton, Ohio (2.9%); Spokane, Washington (2.8%); Allentown, Pennsylvania (2.8%); and Akron, Ohio (2.5%).
At the low end were San Jose, California (0.5%); Baton Rouge, Louisiana (0.6%); Minneapolis, Minnesota (0.6%); Columbus, Ohio (0.7%); Milwaukee, Wisconsin (0.8%); and Pittsburgh, Pennsylvania (0.8%).
When diving rent by home price to derive what Markerr calls gross yield—some of the highest were in New York State: New York-Newark-Jersey City (14.7), Syracuse (10.4%), and Albany-Schenectady-Troy (9.3%). After them come a few with gross yields between 8% and 9%.
Back in April 2921, Walker & Dunlop, estimated that SFR rental growth would exceed those of multifamily, office, retail, storage, and hospitality growth by 2022. At the time, SFR and BTR rent growth were the strongest of any.