Rental Homes Are Getting Harder to Find and More Expensive
November 20, 2019
As affordability and availability make it harder for Americans to buy homes, many find themselves renting instead. This has made rental homes scarcer and more expensive, particularly for single-family rental homes. Vacancy rates for rental properties saw a 0.3 percent decrease in the third quarter.
The lower end of the market has seen the biggest increase in rental costs. According to CoreLogic, rentals going for less than 75 percent of the regional median saw a 4 percent annual increase in September. Conversely, high-end rentals are seeing slower rent increases. Rentals with prices above 125 percent of the regional median saw just a 2.9 percent increase.
The lack of available rental homes is especially surprising considering the boom in rental homes after the housing crisis of 2008. In the years following the market’s collapse, investors rushed to buy foreclosed properties and convert them into rentals. The total number of single-family rentals jumped 38 percent from 2010 to 2016, according to Capital Economics. Despite this boom, Capital Economics also reports that the number of rental homes available for less than $1,250 has fallen 40 percent since 2013.