Nationwide, single-family rental growth did slow for 5th consecutive month in September
Based on CoreLogic's latest Single-Family Rent Index (SFRI), which analyzes single-family rent price changes nationally and across major metropolitan areas, consistent evidence of a single-family rental market cooldown follows nearly two years of above-trend rental price hikes.
Single-family rent growth in September 2022 slowed for the fifth consecutive month to 10.2% from a high of 13.9% in April 2022. Additionally, rent growth this September was slightly below that of September 2021. The rent increase slowdown comes as inflation stretches tenants' pocketbooks.
"Annual single-family rent growth decelerated for the fifth consecutive month in September but remained at more than twice the pre-pandemic growth rate," said Molly Boesel, principal economist at CoreLogic. "High mortgage interest rates may be causing potential homebuyers to hit pause and remain renters, keeping pressure on rent prices. However, the monthly rent change was negative in September, resuming the typical seasonal pattern for the first time since 2019, which could signal the beginning of rent price growth normalization."
Of the 20 metro areas covered, Miami posted the highest year-over-year increase in single-family rents in September 2022 at 20.1%. Orlando, Fla, recorded the second-highest gain at 18.3%, while Boston ranked third at 10.6%. St. Louis posted the lowest annual rent price gain at 5.2%. While rent growth in many fast-growing metros has decelerated compared to last September, return to offices, colleges and cities is driving rent growth higher in other metros where rent growth was lagging, such as Boston, New York, Chicago, Philadelphia.
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 during this time. "As single-family rent prices continued growing at a rapid pace, preferences for attached rentals began to emerge in early 2022, and by summer had higher increases than detached properties. Attached single-family rental prices grew by 10.7% year over year in September compared to the 9.3% increase for detached rentals," said Boesel. "However, detached rental price growth is still outpacing that of attached homes on a two-year basis, a respective 22.6% increase compared with 19.6%."
To gain a detailed view of single-family rental prices, CoreLogic examined four tiers of rental prices. National single-family rent growth across the four tiers, and the year-over-year changes, were as follows: