Mortgage Watch | November 25th, 2019

Single-family rentals continue to get more expensive

Apartment living has its advantages, but it seems today’s renters are opting for single-family homes instead of schlepping their bags of groceries up elevators. More room for their pets to roam? Possibly. After all, it’s reported that 75% of renters own a furry friend. All we know is that apartment rental occupancy rates hit an all-time low. Meanwhile, single-family rental prices have also surged.

CoreLogic reports that U.S. single-family rent prices rose 3% in September over August. If we compare this to last September, however, the national rent increase has remained flat. Looking around for comparisons, Phoenix saw the highest year over year rent price increase, 6.7%, while Miami saw the lowest, 1%.

Low rental home inventories seem to spur the growth of single-family rental prices. September is also the 65th month in a row where low-end rentals spurred national rent growth, according to HousingWire’s Julia Falcon. “Rent prices among this segment, defined as properties with rent prices less than 75% of the regional median, increased 3.8% year over year in September 2019, the same as in September 2018,” she says.

Upscale rentals (more than 125% of a particular region’s median rent), increased 2.9% in September, slightly up from last September’s 2.5%. But Phoenix is still the rising star, having seen the highest year-over-year increase for the 10th year in a row, at 6.7%. Phoenix also had an annual employment growth of 2.4%, which is higher than the national employment growth average of 1.4%.

“Metro areas with limited new construction, low rental vacancies and strong local economies that attract new employees tend to have stronger rent growth,” says Falcon.

Source: CNBC, CoreLogic, TBWS

Rates Currently Trending: Neutral

Mortgage rates are trending sideways this morning. Last week the MBS market improved by +1bps. This caused rates to move mostly sideways for the week on low volatility.

 

 

About the Author

Tim Morissette, also known in the community as Mr. Foothill Ranch, offers over 43 years of real estate experience which has given him an established reputation and unmatched market knowledge. He is joined by his wife, Michele and son Matt, as they continue to offer personal service with an emphasis on achieving his clients’ real estate goals.  This unique combination of traits has led to his proven track record of referral and repeat business. This can be witnessed by the trust of homeowners in Foothill Ranch where he has sold twice as many homes and represented three times more buyers than the next-leading real estate agent for the last 23 years.

As residents of Foothill Ranch since 1994, Tim and Michele are actively involved in the community by fundraising for Foothill Ranch Library, Make-a-Wish Foundation, Cancer Society, Homes for Habitat, Relay for Life, South County Outreach, and the local church and schools. Tim enjoys sponsoring community-wide garage sales, as well as sponsors Paper Shredding and E-Waste Recycling events twice a year.

Tim and Michele are dedicated to their family of four sons, daughter-in-laws, and grandchildren. As a family, they enjoy many outdoor activities which include camping, spearfishing, mountain climbing and exploring the miles of hiking and equestrian trails in Foothill Ranch and the Whiting Ranch Wilderness Park. Tim and his sons are also avid snowboarders and enjoy mountain biking and lobster diving. Family is a top priority in the Morissette household. They look forward to helping more families achieve their dreams of homeownership.