(Bloomberg) -- U.S. single-family home rental prices jumped 7.5% in June, showing no sign of abating amid a hot housing market and construction lags.
The year-over-year pace accelerated from 6.6% in May, which was the biggest percentage gain since at least 2005, according to CoreLogic Inc., which tracks changes nationally. The most expensive homes saw the biggest jump in rents, at 9.6%.
While inflation has somewhat moderated for some goods and services -- including lumber -- rents are picking up the pace.
Rent prices are now higher than if they had stayed on their pre-pandemic track. Because rents are not as volatile as other items, continuing gains will be harder to reverse, and could fuel inflation in the longer term.
The highest single-family rent price increases continue to be recorded in the Southwest, with Phoenix and Las Vegas up by 16.5% and 12.9%, respectively, CoreLogic said. Chicago and Boston were the only two of the 20 metropolitan areas analyzed to post rent decreases.
With home values also soaring in the U.S. -- reaching an all-time high median price of $357,900 last quarter -- many Americans have little choice left but renting.
CoreLogic expects that the rental market will see a similar trend as the for-sale sector: increased migration to less-dense and lower-cost areas.
“For would-be homebuyers who have been either priced out of the market or unable to find a home in today's supply-constrained market, detached rentals are overwhelmingly preferred,” Molly Boesel, an economist at CoreLogic, said in a statement.
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