HOUSTON – (By Dale King, Realty News Report) – The cost of renting a single-family home in Houston has spiked significantly in the aftermath of Hurricane Harvey, which made landfall in Texas about a year ago.
Houston’s rental rates of single-famlly homes are up over 4 percent, compared to the pre-Harvey market, according to CoreLogic, a global property information, analytics and data-enabled solutions provider. Miami, another major metro area impacted in last year’s hurricane season, also reported gains in rental-home rents.
CoreLogic reports that stable and sustained growth in national employment is applying upward pressure on rental rates nationally.
The Irvine-Calif.-based firm recently released its latest Single-Family Rent Index which examines changes in the cost of leases for single-household units nationally and among 20 metropolitan areas. Data collected for April 2018 shows a national rent increase of 2.9 percent, compared to 2.6 percent in April 2017.
The report says metro areas with limited new construction, low rental vacancies and strong local economies that attract new employees tend to have stronger rent growth. Both Orlando and Phoenix experienced high year-over-year rental cost progress, driven by employment growth of 3.2% and 2.8% year-over-year respectively. This compares with the national employment growth average of 1.6%, according to data from the United States Bureau of Labor Statistics.
Of the 20 metros analyzed, Chicago experienced the lowest employment growth, which could be a factor in its low rent growth of 1.0%.
“Rent prices increased significantly across the country in April, with the southwest region showing the highest growth rates,” said Molly Boesel, principal economist at CoreLogic. “National employment growth has remained steady in 2018, which could be a driver of continued rent increases.”
Different areas report different rental situations. Lease prices continue to rise in areas affected by last year’s hurricanes, like the Houston and Miami metro regions. Houston recorded rental growth of 4.1% year-over-year in April 2018. This is up from a 3.4% increase in March 2018 and a 1.1% hike in October 2017.
Not only was the October figure the first increase in average monthly rent in Houston since April 2016, but was one of the earliest post-hurricane rental price tallies, conducted just a couple of months after Hurricane Harvey ravaged the city with intense flooding.
After a lengthy slide in pre-Harvey rental rates in Houston, prices began to rise again because the hurricane (which hit in late August 2017) damaged and/or destroyed more than 100,000 homes. Thousands of people flocked to rentals to escape from flooded homes.
Actually, a rental price spike is also being recorded in Miami, where the South Florida population hub reported a 1.5% year-over-year rental increase.
The document says that prior to the late summer 2017 hurricanes, rent prices had been decreasing in both Houston and Miami.
CoreLogic’s SFRI shows that single-family rental costs on average have climbed between 2010 and 2018. However, year-over-year rental rate upswings have slowed since February 2016, when they peaked at 4.2 percent. The surges have stabilized over the last year, settling at a monthly average of 2.7 percent.
Rent fluctuations vary significantly across metro areas. Las Vegas once again had the highest year-over-year increase in single-family rents in April 2018 at 5.9% (compared with April 2017), followed by Phoenix (5.5% increase) and Orlando (5.3% increase). For the sixth consecutive month, Honolulu was the only metro with decreasing rent prices, declining 0.3% year over year in April 2018.
Two other Texas metros on the CoreLogic list, Dallas and Austin, reported nearly identical rental increases. The Big D saw rental bills go up around 2.5% in April 2017 and slip below 2% a year later. Austin didn’t quite reach 2.5% in the spring of 2017 and was closer to 1.3% the following year.
August 2, 2018 Realty News Report Copyright 2018