Based on CoreLogic's latest Single-Family Rent Index, U.S. single-family annual rent growth remained at a record high in May 2022, posting a 13.9% increase from May 2021. This growth matched April's increase, representing the first time that price growth did not accelerate from the previous month since January 2021. Sustained high rent prices are partially due to a robust labor market, with the national unemployment rate at 3.6% in May, down by 2.2 percentage points on an annual basis and the lowest recorded since before the start of the (coronavirus) COVID-19 pandemic.
Additionally, since rising interest rates are sidelining more prospective homebuyers, landlords have a larger pool of potential tenants and thus more leverage to raise prices. The year-over-year U.S. single-family rent price growth was more than twice the May 2021 increase and more than eight times higher than the May 2020 growth.
"Increases in mortgage rates and high home prices can be headwinds to the for-sale housing market but may be continually pushing up single-family rents," said Molly Boesel, principal economist at CoreLogic. "While the annual increase in the SFRI for May matched April's growth rate, the gain remained at a record-high level. Furthermore, the month-over-month growth rate for rents in May was well above that month's 19-year average."
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:
Of the 20 metro areas shown in Table 1, Miami posted the highest year-over-year increase in single-family rents in May 2022 at 39.5%, the 10th consecutive month it has topped the nation for growth. Orlando, Florida and Las Vegas recorded the second- and third-highest gains at 24.8% and 16.7%, respectively. St. Louis (7.9%) and Honolulu (7%) posted the lowest annual rent price gains.
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. However, as rental inventory remains slim, the gap between attached and detached rental growth started to close last fall. In May 2022, attached rental property prices grew by 13.4% year over year, compared to the 13.6% increase for detached homes. Nevertheless, detached rental prices have grown at a significantly higher rate over the past two years (24.4%) than attached rental prices (17.6%).