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Rent Rose So Much, So Fast It Might Have Contributed To Latest Downtick

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Yet another report — this one by CoreLogic — shows that the rapid pace of rent increases is beginning to slow. Some of the increases occurred so quickly that they may have cooled growth.

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Rent growth for single-family homes slowed for the third-straight month in July, coming down from pandemic-era highs, according to a new report.

The housing data provider CoreLogic found that rent gains peaked in April before beginning its ongoing slowdown.

That’s not exactly great news for renters: rent for single-family homes remains up 12.6 percent compared to the year before. Rent remains up year over year, but the pace of growth is falling from historic highs, according to the report.

That slide might actually have started as a result of the meteoric rise in prices, the report said.

“Large rent price increases in major Sun Belt metros over the past year have eroded affordability, making these areas less attractive to people who may have been considering migrating and thereby tempering demand,” according to CoreLogic’s latest data.

Still, single-family rent has risen much faster than historical average.

“Keep in mind, places like Miami still had a 30 percent increase in rents, Molly Boesel, principal economist at CoreLogic, told Inman. “That’s on top of an 18 percent increase, roughly, in rent in Miami a year ago.”

Rent remains up 30.6 percent in Miami year over year. That’s actually down from its peak of 40.8 percent in March, but the city saw rent grow faster in the past year than any other market, according to the report. Phoenix saw its rent growth slow from 18.2 percent in March to 12.2 percent in July. 

All over the Sun Belt, which has been a major target from investors, rent growth is eroding.

“We don’t really [foresee] it falling,” Boesel said. “We definitely see it tempering — slowing down, just as we expect home prices to slow down but not fall.”

“I think what a renter could hope for is prices slow down enough and incomes pick up enough that they come more into balance,” she added.

CoreLogic also tracks changes along the spectrum of different rental types.

Changes based on rental type

  • Lower-priced (75 percent or less than the regional median): 13.9 percent, up from 6.3 percent in July 2021
  • Lower-middle priced (75 percent to 100 percent of the regional median): 13.6 percent, up from 7.5 percent in July 2021
  • Higher-middle priced (100 percent to 125 percent of the regional median): 13.4 percent, up from 8.4 percent in July 2021
  • Higher-priced (125 percent or more than the regional median): 11.4 percent, up from 10.1 percent in July 2021

Rent isn’t down everywhere, though. It actually ticked up in July in Philadelphia, New York and Washington from April through July, CoreLogic reported.

Fastest year-over-year rent growth

  • Miami: 30.6 percent
  • Orlando: 22.2 percent
  • San Diego: 14 percent
  • Atlanta: 14 percent

St. Louis posted the lowest annual rent price gain at 4.4 percent.

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