Arizona continued to outpace the national average for single-family home rental prices in Arizona during the first half of 2018, according to a report from CoreLogic. Phoenix rents increased an average of 4.7 percent year over year for the first six months of 2018. Nationally, rents rose a cumulative 4.1 percent between January. and June.
The CoreLogic report attributes heightened demand for single family rentals in Phoenix to the city’s higher employment growth rate–3 percent, compared with 1.6 percent nationally. More employment opportunities attract new residents to the West Valley at a rate of 222 people per day. But Phoenix’s low rental property inventory means tenants are snapping them up as soon as one becomes available at (almost) any price.
Contractors and investors are building new rental properties and refurbishing old ones as fast as they can in an effort to bridge Phoenix’s inventory gap, but the Valley’s fast- and ever-growing population keeps demand sky high. In fact, according to Molly Boesel, principal economist at CoreLogic, high demand and low supply of lower-priced single-family rental properties continue to push up rent prices for that segment of the real estate market.
Demand for single-family rentals isn’t expected to taper off during the next six months, according to the report. With home prices rising 6.8 percent nationally, it’s becoming increasingly hard to find affordable homes to purchase.
Arizona’s median home price in July was $242,100 in July, up 8 percent over 2017.
Additionally, rising home prices in the Phoenix area are driving more would-be homeowners to apartment rentals, a trend that could lead to a shortage of apartments in Phoenix, even though nearly 17,000 units are currently under construction.
Phoenix single-family home rentals