Single-Family Rental Market is BOOMING

[Jalen Chanthaboury]

The single-family rental demand continues to be at an all-time high amid the pandemic. The NHRC Single-Family Rental Market Index reported a score of 74.4 out of 100 for the third quarter of 2020. This signals a vigorous market. The index score is based on leasing activity, household occupancy, and anticipated demand. New residents of the single-family rental home market are adjusting to the realities of working and schooling from home. A majority of the American population can agree that a home is no longer just a place to live. A home has transformed into an environment of business and learning. Nearly 60% of new single-family rental home residents are relocators from urban residential markets. Single-family rentals certainly have become a much more affordable and flexible option for American families.

Although, the median single-family rent prices are slowly increasing over time; rent has increased by 2.5% year-over-year. What's awesome is that even with the skyrocketing levels of demand, the average rental rate for single-family rental homes remains well below the average monthly mortgage cost for owner-occupied single-family homes. It is essentially cheaper to pay rent on single-family homes in comparison to paying a mortgage on them.

The increased demand for single-family rentals could most likely lead to a decade of undersupply in the for-sale market according to the RCLCO Real Estate Advisors market analysts. It seems to me that these single-family rental tenants are in no rush to achieve homeownership. With home prices continuing to remain stagnant, it wouldn't make sense for these tenants to part ways from their affordable and flexible single-family rentals anytime soon. They're satisfied with their living conditions, rent is cheap, work and objectives are being complete. You can't ask for more.