While single-family home rent prices in April slowed to the lowest level since November 2010 nationwide, metro Phoenix posted the fastest increase in rents since late 2018, according to a new report released by CoreLogic (NYSE: CLGX).
Nationwide, shelter-in-place directives coupled with the highest unemployment rate in 80 years left renters hesitant to pursue new living accommodations, which pushed rent price growth to its lowest rate in more than nine years during April — since the initial recovery of the Great Recession, said Molly Boesel, principal economist for CoreLogic.
While economic disruptions affect all parts of the housing market, the impact can often be seen in the rental market sooner than the for-sale market, she said.
“This means changes in rents can foreshadow changes in home prices,” Boesel said.
Data collected for April 2020 shows a national rent increase of 2.4% year over year, down from a 2.9% year-over-year increase in April 2019.
But rents in Phoenix increased from 6.6% from a year earlier, far above the next metro on the list for rent increases, Tucson, which saw rents increase 3.7%, and almost three times faster than for the U.S. overall, Boesel said.
“Strong rent growth in Phoenix is associated with population and job growth,” she said. “Arizona ranked third for population growth in 2019 by both number and percentage increase, and Phoenix job growth has been among the highest in the nation. Job losses from Covid-19 have been lower in Phoenix than in other areas, which kept the pace of rent increases high in the metro in April.”
Behind Phoenix and Tucson in single-family year-over-year rent growth during April was the Charlotte-Concord-Gastonia, North Carolina and South Carolina area, which posted 3.4% growth, followed by the San Diego-Carlsbad area of California, showing 3.2% growth. Right behind that area was Las Vegas-Henderson-Paradise area of Nevada, showing 3.1% growth. In 2019, the Las Vegas area was right up there with Phoenix and Tucson in YOY percent changes.