CoreLogic’s latest Single-Family Rent Index (SFRI)–which analyzes single-family rent price changes nationally and across major metropolitan areas—reports that nationwide, rent prices were up by 8.8% year-over-year in October 2022, the lowest rate of growth recorded since June 2021. This marked the sixth straight month of slowing U.S. rental price growth, the lowest rate of appreciation in more than a year, but still three times higher than the pre-pandemic level.
Despite the continued rental market cooling, a shortage of available properties is keeping costs elevated, a trend that is partially fueling year-over-year gains in the lower-priced tier.
Regionally, Miami led the nation for rent growth for the 15th consecutive month at 16.3%, but gains there have slowed dramatically since the spring when they hit 40.8%.
“Single-family rents decreased again on a monthly basis in October but were still up year over year,” said Molly Boesel, Principal Economist at CoreLogic. “While rents typically experience a seasonal decline in October, this year’s decrease was larger than average and could point to prices slowing more sharply than expected in the coming months.”
To gain a detailed view of single-family rental prices, CoreLogic examines four tiers of rental prices. National single-family rent growth across the four tiers, and the year-over-year changes, were as follows:
- Lower-priced (75% or less than the regional median): 11%, up from 9.7% in October 2021
- Lower-middle priced (75% to 100% of the regional median): 9.9%, down from 10.3% in October 2021
- Higher-middle priced (100% to 125% of the regional median): 8.8%, down from 11.4% in October 2021
- Higher-priced (125% or more than the regional median): 7.5%, down from 11.4% in October 2021
Of the 20 metro areas shown in Table 1 below, Miami posted the highest year-over-year increase in single-family rents in October 2022, at 16.3%. Orlando, Florida recorded the second-highest gain at 15.5%, while Boston ranked third at 12.1%. Honolulu saw the lowest annual rent price gain at 4.8%.
The single-family rental market accounts for half of the rental housing stock, yet unlike the multifamily market, which has many different sources of rent data, there are minimal quality adjusted single-family rent transaction data.
Differences in rent growth by property type emerged after COVID-19 took hold, as renters sought standalone properties in lower-density areas. This trend drove an uptick in rent growth for detached rentals in 2021, while the gains for attached rentals were more moderate. As single-family rent prices continued growing rapidly, preferences for attached rentals began to emerge in early 2022, and by summer, they had higher increases than detached properties. Attached single-family rental prices grew 9.5% year over year in October compared to the 7.6% increase for detached rentals.