Demand for single-family rental homes is showing no sign of easing up, and that is pushing rents through the roof, especially for the highest-priced properties.

As a result, investors are now flooding into the market again, after falling back a bit during the first year of the Covid pandemic.

Nationally, rents rose 9.3% in August, year over year, up from a 2.2% year-over-year increase in August 2020, according to CoreLogic.

For the first time since before the pandemic hit, all major metropolitan housing markets covered by CoreLogic showed positive rent growth. Miami led the way with a 21% gain, followed by Phoenix at 19% and Las Vegas at 15%.

“Converging economic trends are driving a surge in single-family rent prices, and consumer confidence has driven an uptick in demand for both renters and buyers,” Molly Boesel, economist at CoreLogic, said in a release. “The ongoing preference toward more living space — and slim for-sale inventory — is forcing would-be buyers back into renting, putting significant strain on the single-family rental market.”

The gains have investors rushing to buy and build more rental properties. In the past year there were roughly 43 announcements totaling more than $30 billion in capital targeting U.S. rental housing, according to tracking by John Burns Real Estate Consulting.

“Since some of this is only the equity investment and excludes the debt, and we know of far more than this that is not public info, the real number is much higher,” wrote Danielle Nguyen, senior manager, research at JBREC in a release.

Nguyen cites several reasons for the investor demand:

• Worldwide bond yields are at historic lows, and investors need yield.
• Inflation is on the rise, and most investors view rental homes as an inflation hedge.
• Record high rent growth is supported by high occupancy rates.
• Renters have demonstrated that they are willing to pay a premium to rent in a new home neighborhood managed by a professional landlord.

That last point is supported by rent growth according to price tier. Lower-priced rentals, (75% or less than the regional median) rose 7.1% in August year over year, up from 2.4% in August 2020. Higher-priced rentals (125% or more than the regional median) climbed 10.5%, up from 2.3% in August 2020, according to CoreLogic.

Even as overall home sales fell back slightly in August, investors made up a larger share of sales than August of 2020, according to the National Association of Realtors. Meanwhile first-time homebuyers, who historically make up about 40% of sales, were at just 29%, the lowest level in more than a decade. Home prices continue to rise sharply, weakening affordability but bolstering demand for rentals.