Annual rental growth slows in the US, up 2.8% year on year
Rents for family homes in the United States increased by 2.8% in the 12 months to February 2018, led by a 5.3% rise in Las Vegas, the latest lettings data shows.
But those looking for a home to rent at the cheaper end of the market are paying more with the figures from real estate firm CoreLogic showing they increased by 3.7% compared to a rise of 2.4% at the upper end.
The index report says that a lack of supply relative to demand has been pushing up rents since 2010, but the growth has been slowing since February 2016 when rents increased 4.2% year on year.
After Las Vegas the next highest growth in rents was in Orlando with an annual rise of 4.8%, followed by Phoenix where they increased by 4.4%. For a third month in a row Honolulu was the only metro where rents fell, down 0.5% year on year.
An analysis of the figures shows that metro areas with limited new construction, low rental vacancies and strong local economies that attract new employees tend to have stronger rent growth. This has happened in both Orlando and Phoenix.
Of the 20 metros analysed, St. Louis experienced the lowest employment growth, which could be a factor in its low rent growth, says CoreLogic.
Meanwhile, rent prices continue to increase in disaster struck areas like the Houston metro area, which experienced growth of 2.7% year on year, up from a 1.2% in October 2017, which was the first rent increase for Houston since April 2016.
‘The slowdown in growth may signal that rents are beginning to stabilise at the low end,’ said Molly Boesel, principal economist for CoreLogic.