Annual U.S. Rent Growth Continued to Ease in May

CoreLogic has released its latest Single-Family Rent Index (SFRI), which analyzes single-family rent price changes nationally and across major metropolitan areas.

The report showed annual U.S. rent growth continued to ease in May, ending the month at 3.4%. Despite the past year’s continuously slowing rent growth, the overall rate of increase is roughly back to its pre-pandemic norm recorded between 2010 and 2019.

The Chicago metro topped the nation for annual rent growth, while New York and Boston also landed in the top five. Similar to trends observed in the latest US CoreLogic S&P Case-Shiller Index, steadily increasing rents in these areas likely reflects rebounding housing demand, as some office workers gradually return from remote jobs.

In April, the CoreLogic S&P Case-Shiller Index fell by 0.24% year-over-year, the first annual loss since April of 2012. However, the annual decline reflects price drops that occurred in 2022. The non-seasonally adjusted month-over-month index, on the other hand, posted its third month of strong gains, up by 1.3% in April, the same increase recorded in March. The recent gains in home prices suggest that they have bottomed out and are on the upward trend again.

“After increasing at an accelerated pace for more than two years, annual single-family rent growth returned to the pre-pandemic rate in May,” said Molly Boesel, Principal Economist for CoreLogic. “High inflation may be affecting renters’ abilities to absorb continually higher monthly payments, which could be keeping year-over-year rent increases relatively low. However, even in the current economic environment, monthly single-family rent increases returned to a typical seasonal pattern in February of this year, suggesting that single-family rents are poised to continue increasing throughout 2023.”

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 5.6%, down from 14.4% in May 2022
• Lower-middle priced (75% to 100% of the regional median): up 4.3%, down from 14.8% in May 2022
• Higher-middle priced (100% to 125% of the regional median): up 3.7%, down from 14.9% in May 2022
• Higher-priced (125% or more than the regional median): up 2.1%, down from 13% in May 2022
• Attached versus detached: Attached single-family rental prices grew by 4.2% year over year in May, compared with the 2.5% increase for detached rentals

Chicago posted the highest year-over-year increase in single-family rents in May 2023, at 6.6%. Charlotte, North Carolina, registered the second-highest annual gain at 5.9%, followed by Boston and New York at 5.7%. Las Vegas experienced an annual rent price decline of -1.3%.

Lower-priced properties saw increases more than double that of those in the highest tier

The increase in properties with rents at least 75% less than the regional median rose 5.6% compared to 2.1% for those with rents at least 125% higher than the median. A year earlier, the bottom group saw an increase of 14.4%, while the highest tier rose 13%. The lower-middle-priced tier was up 4.3%, and the higher-middle-priced tier rose 3.7%. Both had grown at an annual rate of nearly 15% in May 2022.

Price increases for both attached and detached single-family houses are shrinking but remain higher for attached units. That group increased by 4.2%, while detached rentals grew by 2.5%.

To read the full report, including more data, charts, and methodology, click here.