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Single-Family Rental Vacancy Rate Tumbles

Single-Family Rental
June 2019

Morningstar Credit Ratings recently published its April 2019 Single-Family Rental performance summary. Following are key highlights:

  • The average vacancy rate declined 40 basis points to 4 percent in March from 4.4 percent in February, the lowest rate since May 2018.
  • The average retention rate for expiring leases dropped to 78.9 percent in February, the latest month available, from 80.4 percent in January.
  • Among the top 20 metropolitan statistical areas, Fort Lauderdale and Denver-Aurora had the highest vacancy rate at 5.8 percent and 5.6 percent, respectively.
  • The Sacramento MSA continued to experience the highest blended rent growth at 7.6 percent, a decline from the previous month at 10 percent, followed by the Phoenix MSA at 7.4 percent.
  • The Chicago MSA again experienced the lowest rent growth at 2.7 percent, followed by Houston at 2.9 percent, and the Raleigh-Cary MSA at 3.1 percent. Interestingly, the Chicago MSA continues to have the lowest rate of rent growth while also having one of the lowest vacancy rates.
  • Rents for properties included in SFR securitizations generally continue to exceed or be in line with the RentRange rents for three- and four-bedroom properties located in the same MSAs. The April SFR Performance Summary has 24 single-borrower deals with close to 86,000 properties.