A decrease in low-end rental growth rates for single-family homes could foreshadow stabilization in rent prices, according to March data released by CoreLogic Inc.
Low-end rentals saw 3.9 percent growth in March, down from 4.4 percent in March 2017, which could be an early signal of stabilization, the data provider said.
CoreLogic defines low-end rentals as properties with rents less than 75 percent of the regional median.
However, Phoenix had the second highest year-over-year increase in single-family rents at 5.4 percent due to both high rent and employment growth, CoreLogic reported.
Phoenix saw employment growth of 3.2 percent year-over-year, compared with national employment growth of 1.6 percent, according to the U.S. Bureau of Labor Statistics.
Molly Boesel, principal economist with CoreLogic, told the Phoenix Business Journal that Phoenix is still accelerating upward in both low-end and high-end single-family rental prices.
She also said Phoenix has a high demand in the rental market, with only a 1.7-month supply of single-family homes. This means all home rentals on the market will be gone in 1.7 months.
Overall, Phoenix is a fairly healthy market, according to Boesel.
Nationally, single-family rent prices have gradually climbed between 2010 and 2018, but increases began to slow after rents peaked at 4.2 percent growth in February 2016, according to CoreLogic.
On the national level, CoreLogic data showed rentals for single-family homes hovering at 2.7 percent growth year-over-year.
CoreLogic (NYSE: CLGX) is a global property information, analytics and data provider that serves real estate markets, capital markets and the public sector.
By Adrian Marsh