According to CoreLogic’s [1] most recent iteration of the Single-Family Rent Index Report, [2] rent growth continued its downward decent in April on a year-over-year basis, falling to 3.7%, or down 14% from the same time last year.
Among all major metropolitan areas tracked by CoreLogic, every city reported rent growth in the single digits or less with the exception of Las Vegas, which was the one city to post a rent decline.
Despite all this, the slowing gains of single-family rental costs are now up more than 25% since the onset of the COVID-19 pandemic in the early months of 2020.
“Single-family rent growth has slowed for a full year, and overall gains are approaching pre-pandemic rates,” said Molly Boesel [3], Principal Economist at CoreLogic. “Prior to 2020, single-family rent gains increased in the range of 2% to 4% for nearly a decade. However, even though growth has slowed over the past year, rents have increased by 26% since February 2020.”
“Furthermore, it appears that rent growth is bottoming out, meaning that increases in single-family rents over the past three years are more or less permanent,” Boesel continued. “The increases, especially at lower price levels, erode affordability and cause tenants to devote more of their monthly budget to rents, leaving fewer funds for other necessities.”
To gain a detailed view of single-family rental prices across different market segments, CoreLogic examines four tiers of rental prices and two property-type tiers. National single-family rent growth across those tiers, and the year-over-year changes, were as follows:
- Lower-priced (75% or less than the regional median): up 6%, down from 14.1% in April 2022
- Lower-middle priced (75% to 100% of the regional median): up 4.6%, down from 14.8% in April 2022
- Higher-middle priced (100% to 125% of the regional median): up 4.1%, down from 14.9% inApril 2022
- Higher-priced (125% or more than the regional median): up 2.4%, down from 13.5% in April 2022
- Attached versus detached: Attached single-family rental prices grew by 4.6% year over year in April, compared with the 2.6% increase for detached rentals
Of the top 20 areas, Charlotte, North Carolina posted the highest year-over-year increase in single-family rents in April 2023, at 6.9%. Boston and Orlando, Florida registered the next highest annual gains, a respective 6.2% and 6%. Las Vegas saw an annual rent price decline of -0.8%.
The next CoreLogic Single-Family Rent Index will be released on July 18, 2023, featuring data for May 2023. For ongoing housing trends and data, visit the CoreLogic Intelligence Blog: www.corelogic.com/intelligence. [4]