Shortages Incite Rental Wars

As buyers over the last 15 months have eaten away at the inventory within the single-family home market, much of the rental inventory has been sold creating a similar shortage of homes available for rent. Even though it appears that the housing market is slowing down to a normal pace, those individuals who were not able to buy homes in the Great Real Estate Rush of 2020 and 2021 are left to simply find single-family homes to rent. But that is becoming problematic according to a recent CoreLogic report on rentals for single-family homes, which is up by 9.3% in August year-over-year. This is about four times the rate that had been reported for the same time in August 2020, which was up 2.2% from 2019.

The single-family home rental market is so strong that all metropolitan housing markets covered by CoreLogic reported positive rent growth for the very first time since CoreLogic began tracking such statistics.

Some of the reasons for this surge in this market is attributed to some of these factors:

• The recovery of the economy in general following the COVID-19 pandemic.
• A strong demand for workers is giving individuals added financial flexibility to spend more on rent.
• The shortage of homes, affordable homes, is squeezing potential buyers into renters.
• Low price single-family home rentals rose by 7.1% year-over-year. The higher-priced rentals increased 10.5% year-over-year.
• According to CoreLogic, the rental market shows no signs of easing up.

The evidence that first time home buyers are being edged out of the market was reflected in the August figures indicating that first-time buyers represented only 29% of all purchases. This figure is the lowest level recorded by CoreLogic since it began reporting on such figures.