Single-family renters are continuing to bear some of the brunt of inflation, which is bad news for them but good news for landlords. According to CoreLogic’s latest Single Family Rent Index (SFRI), U.S. single-family rent prices came out of the gates strong in 2022, increasing 12.6% year-over-year in January. This is significantly higher gains in the SFRI compared with January 2021, which began last year with an increase of 3.9% versus January 2020.
All major metropolitan areas covered in the CoreLogic SFRI release experienced year-over-year increases, with Sun Belt cities once again registering the largest gains. The robust price growth was partially due to a continuing shortage of available rental properties. Also, the cost of purchasing a home rose by 19% on an annual basis in January, shutting out many would-be homebuyers and forcing them to remain renters. The year-over-year national rent price growth more than tripled the gain recorded in January 2021 and more than quadrupled the increase from January 2020.
CoreLogic examines four tiers of rental prices and their year-over-year changes. Here are the findings.
- Lower-priced (75% or less than the regional median): 12%, up from 3% in January 2021
- Lower-middle priced (75% to 100% of the regional median): 13.3%, up from 3.2% in January 2021
- Higher-middle priced (100% to 125% of the regional median): 13.4%, up from 3.6% in January 2021
- Higher-priced (125% or more than the regional median): 12.2%, up from 4.5% in January 2021
Drilling down further into specific regions, the overheated rental market correlates to warmer climates. Miami once again experienced the highest year-over-year increase at 38.6%. In January 2021, the city’s year-over-year gain was only 2.2%. Orlando and Phoenix logged the second- and third-highest gains at 19.9% and 18.9%. Conversely, the Washington, D.C. metro area recorded the lowest annual rent price growth, at 5.6% in January.
“Single-family rent growth extended its record-breaking price growth streak to 10 consecutive months in January,” said Molly Boesel, principal economist at CoreLogic. “Rents increased across the country, and the gains were highest in the Sun Belt, which also had strong population growth last year.”
As rental inventory remains slim, the gap between attached and detached rental growth started to close last fall. In January of 2022, attached rental property prices grew by 12.2% year over year, compared to the 12.4% increase recorded for detached homes. This is the closest that attached and detached growth rates have been since March 2020.