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(TheRealDeal) – Investors pouring big money into the single-family rental sector just received some welcome news.

Rents for single-family homes increased 7.5 percent year-over-year across the U.S. in June, the highest such increase recorded since at least 2005 and a sharp uptick from the 1.4 percent increase in June 2020, according to CoreLogic, a housing data provider.

The single-family rental market has seen a surge in activity since the beginning of the pandemic as the red-hot housing market has driven prices to record highs and turned prospective buyers into renters. In response, private equity and alternative asset managers such as Blackstone, Brookfield Asset Management and KKR have invested billions into the space.

“Ultimately, for would-be homebuyers who have been either priced out of the market or unable to find a home in today’s supply-constrained market, detached rentals are overwhelmingly preferred — and remain in high demand,” said Molly Boesel, principal economist at CoreLogic in a statement.

Phoenix had the highest year-over-year increase in single-family rents at 16.5 percent. Las Vegas, which was hit hard by the pandemic, had a strong recovery, posting the second-highest rent growth with a year-over-year gain of 12.9 percent.

Miami rent prices grew the third most at 12.4 percent to a median monthly rent of $2,131. Meanwhile, New York prices rose 6.7 percent to $2,743, while Los Angeles prices rose 5.4 percent to $3,048. Among large cities, only Chicago and Boston saw rents drop. Chicago declined 1 percent to $1,964 and Boston declined 2.7 percent to $2,775.

CoreLogic also looked at different price points for single-family homes. Rent growth increased the most for higher priced units — where rents are 125 percent or more than the regional median — at 9.6 percent year-over-year, up from 1.2 percent in June 2020.

While the single-family rental business has seen an influx of investment, skeptics wonder whether the business model is scalable. Finding available homes to purchase is difficult in the current housing market, and the possibility of rising interest rates could reduce profit margins for rental operators. Housing advocates also argue that institutional landlords are responsible for higher eviction rates.