Newly released RentRange data shows a continued trend of strong single–family rent growth among Sun Belt states, with MSAs in Florida and California most heavily represented on the list. Rising home values in Florida and California, in particular, are creating hurdles for potential buyers—and, therefore, are continuing to drive a growing single–family rental market featuring strong rent increases and low vacancy rates.
The new report from RentRange, one of the premier providers of market data and analytics for the housing industry, ranks the top 25 U.S. Metropolitan Statistical Areas (MSAs) by average rental rate increase for single–family homes between Q2 2016 and the same quarter in 2015. The data analysis also identifies the average gross yield generated by rental properties within these markets in Q2 2016.
Of the 25 markets, two of the top three highest performing MSAs by average gross yield, which demonstrates income return from an investment prior to operating costs, are new to the ranking this quarter compared to last quarter—and are located outside of the Sun Belt. Grand Rapids–Wyoming, Mich., moves into the top spot with an average gross yield of 15.62 percent while Pittsburgh, Pa., ranks third with an average gross yield of 15.14 percent. This indicates that properties in these markets have a high income generation to home value ratio.
“An increasingly competitive home buying market bodes well for the single–family rental market relative to both demand and rental rate increases,” said Wally Charnoff, Chief Executive Officer, RentRange Data Services. “As home prices appreciate across the U.S., detailed market intelligence is essential to making well–informed and thoughtful investment decisions for single–family rental properties.”
Ranking by Year-Over-Year Rental Rate Increase – Q2
|Rank||MSA||Change in Rent
|Average Gross Yield – Q2|
|1||Cape Coral-Fort Myers, Fla.||26.1%||9.14%|
|2||New Orleans-Metairie-Kenner, La.||20.6%||11.78%|
|4||Deltona-Daytona Beach-Ormond Beach, Fla.||15.7%||10.20%|
|5||Port St. Lucie, Fla.||15.2%||10.28%|
|9||Charleston-North Charleston, S.C.||13.7%||9.77%|
|10||Santa Barbara-Santa Maria-Goleta, Calif.||13.1%||5.57%|
|13||Atlanta-Sandy Springs-Marietta, Ga.||12.3%||11.77%|
|14||San Francisco-Oakland-Fremont, Calif.||12.0%||5.35%|
|15||Little Rock-North Little Rock-Conway, Ark.||11.6%||11.70%|
|16||San Jose-Sunnyvale-Santa Clara, Calif.||11.5%||4.39%|
|17||Shreveport-Bossier City, La.||11.5%||15.29%|
|18||Naples-Marco Island, Fla.||11.5%||8.07%|
|19||Palm Bay-Melbourne-Titusville, Fla.||11.3%||10.76%|
|22||Santa Rosa-Petaluma, Calif.||10.7%||5.49%|
|24||Grand Rapids-Wyoming, Mich.||10.3%||15.62%|
RentRange produced the rankings of three-bedroom homes using metropolitan statistical areas, a standardized method for identifying city centers and immediate suburban areas. RentRange gathers rental data on approximately 250,000 single-family houses per month from a variety of contractual sources, including multiple listing services, property managers, landlords and listing websites. Yields are derived from RentRange’s proprietary automated valuation model.
About RentRange and RentRange Data Services
RentRange Data Services is an innovative marketing services company specializing in U.S. real estate. The company provides marketing services to Investability Real Estate, Inc., Investability and RentRange. RentRange Data Services is headquartered in Denver, Colo. RentRange is one of the nation’s premier providers of information for the single–family rental sector, delivering address and market–level rental data, analytics and rent–based valuation solutions for a diverse customer base. The RentRange® reports help customers make data–informed decisions about the single–family rental market. The RentRange suite of data solutions includes individual property reports, market metric reports, customized data and analytics and single–family rental investor lists. RentRange is part of the Altisource Portfolio Solutions S.A. (NASDAQ: ASPS) family of businesses.