NASHVILLE, TN — Prices for single-family rental units have soared over the past year as the COVID-19 pandemic prompted households to reevaluate their living spaces. Lower-priced units increased 3.2%, while higher-priced single-family rentals rose 5%, according to the Single-Family Rent Index by CoreLogic. And the hottest trend has been toward standalone rental properties with more space in less dense neighborhoods, which grew five times as fast as rentals in attached units since last year.
Even before the COVID-19 pandemic hit, rental unit vacancies were at multi-decade lows, and that demand was already pushing rent prices up across the nation, a Harvard University study showed. Fueling that growth was the fact that 88% of new rental construction from mid-2018 to mid-2019 opened with an asking price of $1,050 or more while the overall number of rental units priced under $1,000 had fallen significantly since 2014.
That said, the growth in rent looks relatively cheap compared to the surge in home prices this year. Until late 2020, overall rent increases—including single-family and multi-family rentals—actually slowed from about 6.2% year over year at the start of 2015 to 1.1% at the end of last year, according to the Zillow Observed Rent Index. On the other hand, home price growth, also according to Zillow, took off during the pandemic, tripling from 3.8% in February 2020 to 11.6% in April 2021.
To determine which large metropolitan areas in America saw the greatest rent increases during COVID-19, researchers at Stessa compared the Zillow Observed Rent Index from March 2020 to March 2021 to find the year-over-year change in median rent. Researchers also calculated the relative cost of living in each area as well as the median income for renters using data from the Bureau of Economic Analysis and the Census Bureau.
Reinforcing the trend toward more spacious rentals, areas with the largest rent increases were more likely to be affordable, lower-density metropolitan areas. For example, in metros like Tucson, Memphis, Knoxville, and Gainesville—where living costs are about 7–10% below average—rents increased by more than 8% year over year. Job opportunities have also been cited as a factor in the push towards higher rents, though that connection is less correlated than density and cost of living. Boise, Knoxville, Port St. Lucie, and Gainesville stand out among the metros that lead the way in rent growth by having unemployment rates below 5%, according to the U.S. Bureau of Labor Statistics.
The analysis found that in the Nashville metro area, the median cost of rent was $1,580 in March of 2020. One year later, rent had increased by 3.0% to $1,618 per month.
Here is a summary of the data for the
Nashville-Davidson–Murfreesboro–Franklin, TN metro area:
• Year-over-year change in rent: +2.4%
• Median rent in March 2021: $1,618
• Median rent in March 2020: $1,580
• Overall cost of living (compared to U.S. average): -5.6%
• Median income for renter households: $46,885
For reference, here are the statistics for the entire United States:
• Year-over-year change in rent: +1.3%
• Median rent in March 2021: $1,739
• Median rent in March 2020: $1,716
• Overall cost of living (compared to U.S. average): N/A
• Median income for renter households: $42,479
For more information, a detailed methodology, and complete results, you can find the original report on Stessa’s website: https://www.stessa.com/blog/cities-most-rent-change-since-covid19/
