U.S. single-family rental price growth rose by 6.4% year over year in December 2022, compared with the 12.1% gain recorded in December 2021, according to a new report from CoreLogic.
CoreLogic’s latest Single-Family Rent Index found that December marked the eighth consecutive month of annual deceleration. Rental price gains also have risen by about an average of $300 over the past two years.
The report also found that of the metro areas analyzed, Orlando, Florida posted the highest year-over-year increase in single-family rents, at 10.8%. Miami recorded the second-highest gain at 9.9%, while Boston ranked third at 9%. Phoenix saw the lowest annual rent price gain at 1.2%.
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:
- Lower-priced (75% or less than the regional median): 9.2%, down from 11.3% in December 2021
- Lower-middle priced (75% to 100% of the regional median): 7.2%, down from 12.5% in December 2021
- Higher-middle priced (100% to 125% of the regional median): 6.3%, down from 12.5% in December 2021
- Higher-priced (125% or more than the regional median): 5.1%, down from 11.9% in December 2021
“Although major tech company layoffs are making headlines, a still relatively healthy U.S. job market is keeping rent prices elevated, with the national unemployment rate hovering near a decade low in December,” said the author of the report. “The job market’s impact on rental price growth has been particularly evident in cities like Miami, which led the country for annual increases throughout most of 2022. Miami’s unemployment rate was 1.6% in December, the lowest of the 20 metros for which CoreLogic publishes rental cost data.”
The author added that “As single-family rent prices continued growing rapidly, preferences for attached rentals began to emerge in early 2022, and by summer, they had higher increases than detached properties. Attached single-family rental prices grew 7% year over year in December compared to the 5.4% increase for detached rentals.”
Molly Boesel, principal economist at CoreLogic, said that “U.S. single-family rental price growth closed out 2022 at about half of what it was one year ago. However, while rent growth has been slowing, it still rose at more than double the pre-pandemic rate. Rental price gains began increasing near the end of 2020 and have risen by about an average of $300 in the past two years. Annual single-family rent growth is projected to slow throughout 2023, but it will likely not decline by enough to wipe out gains from the past two years.”
For the full report, click here.