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: ‘It really does have a profound impact’: Renters in these properties have seen prices jump by $400 since February 2020

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If you’re dreading the first of the month, you’re likely not alone.

Rental costs for single-family homes were up 26% in August from the pre-pandemic prices of February 2020 — with the national median rent for a three-bedroom property jumping by $400 a month, according to Molly Boesel, principal economist for the housing-research firm CoreLogic.

“If you think about what a renter could do with that $400, that really cuts into their expenses,” Boesel told MarketWatch. “Especially as prices for everything are up across the board — it really does have a profound impact on expenses for renters.”

The average rent for a three-bedroom home was about $1,900 in July, according to CoreLogic, which released its most recent Single-Family Rent Index report Tuesday. Rents for single-family homes in popular cities like Miami and Orlando, meanwhile, were running for a median of $2,588 and $2,044 that month, respectively.

Those kinds of price increases are helping fuel inflation, while also contributing to a rise in eviction filings in some cities. Yet while U.S. single-family home rental costs increased 11.4% year over year in August, that marked the fourth consecutive month of cooling growth. 

Between 2010 and 2020, rents typically grew at an annual pace of 2% and 4%, Boesel said, so prices are still rising quite a bit in comparison. But annual rental growth is nonetheless beginning to decelerate, partly because “rents have continued to grow for so long at such a high rate, that the growth was just due to slow down,” Boesel said. Prices also remain elevated due to a shortage of available rental units. 

That constrained supply is both a holdover from earlier in the pandemic, when people moved from the city into areas where they could get larger single-family homes, and a consequence of would-be homebuyers waiting on the sidelines and renting for longer amid higher rates and upheaval in the housing market. 

“If we calculate out the typical mortgage payment on a median-priced home, it went up 50% from the beginning of the year until now,” Boesel said. “Those monthly payments were just too much for some potential buyers, who are also now staying in the rental market.”

Read next: When people retreated from cities to the suburbs due to COVID, low-skilled workers left behind paid the price

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