U.S. rent price growth has stabilized for the first time since the pandemic, according to a new CoreLogic Inc. report on single-family home rentals.
Among the 20 metro areas CoreLogic (NYSE: CLGX) tracks in its Single-Family Rent Index, metro Phoenix had the highest year-over-year increase in single-family rents in July for the 20th consecutive month, but even the hot Valley market finally showed signs of cooling.
In metro Phoenix, July 2020 rent increases of 4.7% are down from a 7.1% year-over-year increase recorded in July 2019 and down from its average growth rate of 6.5% in the first quarter of 2020.
“Even though rent increases in Phoenix slowed sharply in July, growth remained the highest of the metros and more than 2.5 times that of the national index,” CoreLogic economist Molly Boesel said. “The relatively strong rent increases in Phoenix compared with other areas was a result of relatively strong employment numbers, which worked to keep demand for rentals high.”
Tucson had the second-highest rent price growth percentage nationwide in July with a year-over-year gain of 4.1%, followed by Charlotte, North Carolina, at 3.4%.
Dallas Tanner, president and CEO of Dallas-based Invitation Homes (NYSE: INVH), said he’s averaging 97.5% occupancy in his single-family rental homes, with about 80,000 rental homes in 16 markets. Of those, about 7,800 rental homes are in metro Phoenix.
Nationwide, renters stay in their single-family homes for an average of three years, which is longer than multifamily rentals, Tanner said.
“Baby boomers are certainly one of our key categories for people that want flexibility,” Tanner said. “A lot of people want the flexibility of being in a good neighborhood with great schools without the burden of ownership. The leasing lifestyle is very desirable.”
With $2 billion in annual revenue, Invitation Homes is focused on buying homes where households are forming and where the demand is, Tanner said.
“We almost prefer to buy older homes much more centrally located than new homes further out on the periphery,” Tanner said.
Once a home is purchased, Invitation Homes invests about $38,000 in renovations.
Source Article: Phoenix Business Journal