As more Americans find it harder to afford a home, rental demand is soaring, especially for single-family homes.
A for rent sign advertising a row house in northeast Capitol Hill, is pictured on Monday, August 26, 2019, in Washington D.C.Anyone out shopping for an entry-level home knows the prices are high and the pickings are slim. Now, the same is holding true for rentals. As more Americans find it harder to afford a home, rental demand is soaring, especially for single-family homes.
Phoenix saw the biggest drop in vacancy rates, to just 2.6%. That in turn pushed rent growth to 6.7% annually. Phoenix has seen very strong job growth and is attracting new employees to the area. Investors rushed into the market, buying thousands of foreclosed properties at discount prices and turned them into rentals. The total number of single-family rental homes jumped 38% from 2010 to 2016, compared with just a 3% rise in multifamily units, according to Capital Economics. The supply of single-family rentals overall has now flattened, but demand is still very strong.