CoreLogic’s Market Pulse for August 2016 reports on the national market and local trends, including a new inside look at the rental sector. Similar to the data company’s CoreLogic Home Price Index (HPI) and CoreLogic Case-Shiller Index, the new Single-Family Rental Index (SFRI) measures the growth of the rental market since January 2007.
After a massive growth spurt at the tail end of 2009 and into 2011 and steady growth that continued for a few years after, the SFRI shows rental price gains have recently begun to soften.
Rent growth peaked at 4.6 percent in December 2014 over the previous year, but as of May, the growth rate was 1.2 percent lower, at an annual uptick of 3.3 percent. Following a similar pattern to that seen in the homebuying market, the rental market has seen a slow-down in the high-end sector as of recently, while lower price points are holding their own.
Rent prices at the lowest end of the spectrum were up 5.3 percent in May over the previous year, marking a three-year growth trend around 5.5 percent. At the high end of the market, rentals were up 2.1 percent annually.
Chicago’s rental growth has slowed in May compared with the same time last year, as seen in the chart above. Chicago’s growth is on the low end for major cities, but the May 2015 and 2016 gap is much less dramatic than what was seen in other major metros like New York City and Miami.
Throughout the nation, single-family rental demand is moderating after years of sharp increases, and tight credit conditions are likely to keep that demand hot, CoreLogic says, particularly in the low- and mid-range price points.
Is a resurgence headed to the market?
Boomerang buyers — homebuyers returning to the market after losing a foreclosed home — have slowly but surely made their way back into the real estate market. Looking ahead to 2017, the return of boomerang buyers has the potential to be strong, the report says.
CoreLogic reports the year is nearing seven years from the foreclosure crisis peak in 2010, which means that the ‘black mark’ of foreclosure will be officially erased from consumer credit reports.
CoreLogic reports on the hardest hit locations for boomerang buyers that returned by 2013. The three highest states for boomerang buyers — Arizona, Nevada and Michigan — saw 32 percent of its foreclosed homeowners come back to action in the market, compared to a 22 percent national average.
Illinois saw about a 17 percent share of boomerang buyers through 2013.
Nationally, the foreclosure rate in June 2016 was 3 percent lower than the previous month and 21.3 percent lower than the same month in 2015. Completed foreclosures increased 5.1 percent monthly in June and dipped 4.9 percent annually in the same month.
According to the graphic above, Illinois is still in the red, with 1.2 percent of its housing stock made up of foreclosures.
Illinois market trends
In the state of Illinois, the Home Price Index increased 0.6 percent month-over-month in June and 3.1 percent annually. Gains are expected to continue in the state at a steady pace of 0.5 percent monthly, CoreLogic says.
Illinois’ annual forecasted growth in home prices, expected to be seen by June 2017, is 4.5 percent.
