Rent growth slumps to the lowest since 2010 as the coronavirus pandemic slams demand

• Single-family rents grew only 1.7% annually in May following a 2.4% increase in April, according to a Tuesday report from CoreLogic.
• The slump in May is the lowest growth rate for single-family rents since July 2010.
• High unemployment rates, income uncertainty, and shelter-in-place orders amid the coronavirus pandemic have kept renters from seeking new living arrangements, slowing the pace of rent increases.
• Read more on Business Insider.

The uncertainty of the coronavirus pandemic is weighing on rent prices, pushing growth to a decade low.

Single-family rents grew only 1.7% annually in May according to a Tuesday report from CoreLogic. The growth rate is a strong deceleration from the 2.4% that rents grew in April, according to the report, and is the lowest growth rate since July 2010, measured by CoreLogic's Single-Family Rent Index.

"Despite local economies beginning to open back up in May, rental demand continued to be impacted by unprecedented unemployment rates and stay-at-home directives, which contributed to the slowing in rent prices," Molly Boesel, principal economist for CoreLogic, wrote in the report.

While rent increases slowed across the board, lower-priced rentals contributed to most of the overall growth, according to CoreLogic. Rent prices in the lowest tier grew 2.8% on the year in May while higher-priced rentals increased only 1.3%.

Metro areas saw the strongest rent growth, although prices varied greatly across the country, the report showed. Phoenix, Arizona, had the strongest year-over-year rent growth, followed by Tuscon, Arizona, and Charlotte, North Carolina.

Read more: Leka Devatha quit a cushy corporate career to start flipping houses. She breaks down how she made $1 million on a single deal by supercharging a simple strategy.

Honolulu, Hawaii, was the only metro area to see rents decline on the year in May, according to the report — a hit to the city's tourism industry from coronavirus weighed on rent prices, Boesel said.

In addition, a link between high unemployment rates and slowed or stagnant rent growth is emerging, according to the report.

"Detroit, a hotspot for the virus, experienced a dramatic, 19.9% decrease in employment, forcing local rent price growth to remain stagnant in May 2020, compared to the year prior," said Boesel. At the same time, employment declines in Phoenix, where rent growth remained strong, were minimal in May.

"As regions like Florida, Texas and Arizona grapple with a resurgence of COVID-19 cases, we may expect to see a more significant impact to rent prices on the local level," said Boesel.