Average family home rents up almost 3% in the US at end of 2017
Average rents for family homes in the United States increased by 2.8% in the year to the end of 2017, led by San Diego.
But annual rental growth has slowed, down from a high of 4.2% in February 2016 although out of the 20 metros covered by the CoreLogic index, only Honolulu saw rents fall.
Rents on higher priced rental homes increased 2.5% year on year and at the lower end of the market they increased by 3.9% but this was still down from a gain of 4.9% in December 2016.
Rent growth varies significantly across metro areas covered by the index. The highest growth was 5.7% in San Diego while in Honolulu rents fell by 2%.
The index results for Houston were notable. Impacted by Hurricane Harvey, the year on year rent index decrease in Houston stopped in October 2017 after 17 months of declines while in December 2017 rents increased by 2.8%, up 4.6% from December 2016.
Metro areas with limited new construction and strong local economies that attract new employees tend to have low rental vacancy rates and stronger rent growth.
Seattle had a rental vacancy rate of 3.4% and experienced a 4.3% year on year rent growth in the fourth quarter of 2017, driven by employment growth of 3.1% which more was more than double national growth of 1.5%.
In contrast, St. Louis and Chicago, where employment growth were both 0.7%, half of the national growth in the final quarter of 2017, experienced 0.8% and 1R year on year rent growth, according to CoreLogic data, and had vacancy rates of 8% and 7% respectively.