Today, the National Rental Home Council and John Burns Real Estate Consulting released their joint Single-Family Rental Market Index for the second quarter of 2020. The index shows strong growth in the single-family rental market during the initial months of the pandemic, April through June.
“As the COVID crisis reverberated throughout the economy in the second quarter this year, demand for single-family rental homes surged,” said David Howard, executive director of the National Rental Home Council. “Most Americans will be working and studying from home for the foreseeable future. So they’re looking for affordable homes in quality neighborhoods with all the amenities and conveniences offered by a single-family home lifestyle.”
Highlights from the index include:
• High demand for single-family rental homes: The Single-Family Rental Market Index rose to 76 in the second quarter of 2020, up from 63 in the first quarter. (The index runs from 0–100. Scores below 50 signal that the market is contracting, while those above 50 signify that it’s expanding.) Key drivers of the market’s expansion include high occupancy rates for single-family rental homes and rising consumer demand for extra space away from dense urban centers.
• Top-performing markets: The Southeast and Southwest are seeing the most growth.
• Occupancy: Occupancy rates jumped 15 percentage points between the first quarter and the second quarter.
• Leasing speed: Nearly 60 percent of operators say homes are spending less time on the market, up from 35 percent in the first quarter.
• Future projections: The market will continue to perform well in the next six months, with a projected index of 75.
“For many Americans, the pandemic has brought a new urgency to the search for housing, and many are discovering the benefits associated with renting a single-family home. Suddenly living in a small apartment in an urban high rise isn’t as appealing for families navigating the realities of working and schooling from home.” Howard said. “Single-family rental homes offer a lifestyle with a full range of conveniences and community amenities without the cost and commitment of homeownership. According to our Index, it’s still more affordable to rent a single-family home than to purchase an entry-level single-family home.”