CoreLogic®, a leading global provider of property information, analytics, and data-enabled solutions, today released its latest Single-Family Rent Index (SFRI), which examines changes in single-family rent prices across major metropolitan areas.
Following nearly two years of above-trend rental price increases, there is consistent evidence of a single-family rental market cooldown. In September 2022, year-over-year single-family rent growth slowed for the fifth consecutive month to 10.2%, down from a high of 13.9% in April 2022. Furthermore, rent growth in September was slightly lower than in September 2021. Rent increases are slowing as inflation strains tenants’ wallets.
“Annual single-family rent growth slowed for the fifth month in a row in September, but remained more than twice the pre-pandemic rate,” said Molly Boesel, principal economist at CoreLogic. “High mortgage interest rates may cause potential homebuyers to pause and remain renters, keeping rent prices under pressure.” The monthly rent change, on the other hand, was negative in September, resuming the typical seasonal pattern for the first time since 2019, potentially signaling the start of rent price growth normalization.”
CoreLogic examines four rental price tiers to gain a comprehensive view of single-family rental prices. The following are the year-over-year changes in national single-family rent growth across the four tiers:
- Lower-priced (75% or less than the regional median): 12.1% in September 2021, up from 8.5% in September 2021.
- Lower-middle priced properties (75% to 100% of regional median): 11.3%, up from 9.4% in September 2021.
- 10.7% of higher-middle priced homes (100% to 125% of regional median): up from 10.6% in September 2021.
- Higher-priced properties (125% or more above the regional median): 8.9%, down from 11.1% in September 2021
Miami had the highest year-over-year increase in single-family rents in September 2022 of the 20 metro areas analyzed at 20.1%. Orlando, Florida came in second with a gain of 18.3%, while Boston came in third with a gain of 10.6%. St. Louis had the lowest annual rent price increase, at 5.2%. While rent growth has slowed in many fast-growing metros compared to last September, a return to offices, colleges, and cities is driving rent growth higher in other metros where increases had been lagging, such as Boston, New York, Chicago, and Philadelphia.
Rent growth differed by property type after COVID-19 took effect, as renters sought standalone properties in lower-density areas. This trend resulted in an increase in rent growth for detached rentals in 2021, while gains for attached rentals were more moderate.
“As single-family rent prices continued to rise rapidly, preferences for attached rentals emerged in early 2022, and by summer had outpaced detached properties.”
Attached single-family rental prices increased 10.7% year over year in September, compared to 9.3% for detached rentals,” according to Boesel. “However, on a two-year basis, detached rental price growth continues to outpace that of attached homes, with a 22.6% increase compared to 19.6%.”
The next CoreLogic Single-Family Rent Index will be released on December 20, 2022, featuring data for October 2022. Visit the CoreLogic Intelligence Blog at www.corelogic.com/intelligence for up-to-date housing trends and data.