Racing Into The Sector

Occupancy rates for single-family rental homes have reached a generational high, driving up SFR rent growth, two new reports said. CoreLogic, Irvine, Calif., reported single-family rent growth reached 4.3 percent in March, up from a 3 percent pace a year ago. Molly Boesel, Principal Economist at CoreLogic, said the rent growth indicates a “preference shift” from multifamily apartment communities to standalone properties as renters seek more space in less dense areas. “Prior to the pandemic, rents for detached properties and attached properties grew at similar rates,” she said. “However, starting in June 2020, rent growth for detached properties accelerated and by March, grew at five times the rent growth rate of attached properties.”

Arbor, Uniondale, N.Y. said SFRs are starting to fill the role that starter homes played for previous generations and noted professional residential operators are “racing” into the sector. “All else equal, 2020 proved a banner year for the SFR sector,” Arbor said in its first-quarter Single-Family Rental Investment Trends report. CoreLogic said higher-priced SFRs are seeing the most rent growth. Assets with rents priced at 125 percent or more of the regional median saw 5 percent rent growth in March, compared to 3.2 percent for properties priced at 75 percent or less of the regional median.

Source: The Mortgage Bankers Association

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