Frustrated Homebuyers Renting Instead

HOUSTON – (Realty News Report) – Rents for single-family houses jumped significantly in 2021 with rents rising 7.8 percent on average, although the market became even tighter at year-end, according to national Single-Family Rent Index by CoreLogic.

With a limited supply of single-family homes for buyers to purchase, people turned to rental housing as an option.

Rents for single-family homes surged at the end of the year. Miami led the nation with a 35.7 percent increase in rents in December over December of 2020, CoreLogic reported.

“Affordability challenges and limited supply created barriers to home purchasing for many prospective buyers. Meanwhile, consumer confidence fell in the latter half of the year, due in part to rising inflation, pushing many to hold on big-ticket purchases like homebuying. These factors have driven elevated demand for single-family rentals and put increased pressure on the market as vacancy rates also hit historical lows,” CoreLogic reported.

Looking ahead, while slowing home price appreciation could help gradually balance demand for the rental market, rent prices will likely remain strong throughout 2022.

“Single-family rent growth had a record-breaking year in 2021, bolstered by increasing employment and low vacancy rates,” said Molly Boesel, principal economist at CoreLogic. “However, as rents make up one-third of the Consumer Price Index, rapid rent growth helped push up inflation in 2021. While rent growth should ease in 2022, inflation may remain elevated for much of this year.”

In Houston, the lack of single-family inventory available for sale, continued to push buyers into the rental market, according to the January 2022 report by the Houston Association of Realtors. Only 21,643 Houston area homes were listed for sale in January, down 14.2 percent from a year earlier, HAR said. Houston’s single-family homes for-sale inventory slid to a tiny 1.4-months supply, HAR reported.

Houston Buyers Turn to Rent Houses Amid Tight Supply and Higher Prices

“Houston’s lease market enjoyed a strong January, most likely fueled by consumers that have postponed homebuying plans until the market yields a more plentiful and affordable supply of housing,” HAR said. “The (Houston) average single-family rent went up 9.7 percent to $2,070 while the average rent for townhomes and condominiums jumped 11.9 percent to $1,801.”

Median rent price data is produced monthly by CoreLogic RentalTrends. RentalTrends is built on a database of more than 11 million rental properties (over 75 percent of all U.S. individual owned rental properties) and covers all 50 states and 17,500 ZIP codes.