US Annual Rent Growth Slows to Nearly Two-Year Low in January, CoreLogic Reports

CoreLogic ,  March 22, 2023

• Single-family rent price growth was up by 5.7% year over year in January 2023, the lowest rate of appreciation since the spring of 2021
• Orlando, Florida continued to lead the country for year-over-year rent price gains at 8.9%, but that increase has slowed significantly since the peak 25% annual growth recorded in April 2022
• All 20 tracked metro areas posted single-digit annual rent price gains, with Phoenix at less than 1%

CoreLogic®, a leading global property information, analytics and data-enabled solutions provider, today released its latest Single-Family Rent Index (SFRI), which analyzes single-family rent price changes nationally and across major metropolitan areas.

U.S. annual single-family rent growth continued to slow year over year in January, declining for the ninth straight month to 5.7%. Orlando, Florida posted the country’s largest annual gain for the third consecutive month, while Miami dropped out of the top three highest-growth markets for the first time since the summer of 2021. None of the 20 metro areas that CoreLogic tracks posted double-digit year-over-year rent gains, the first time that trend has been observed since late 2020.

Nevertheless, rent growth and gains in all four price tiers were still higher in January than before the pandemic. Though annual gains in all price tiers have steadily declined since last summer, the low tier has experienced stronger growth. The lowest-priced single-family rentals were up by 8.5% year over year in January, higher than the other three tiers. Low-tier growth is now about three times the pre-pandemic rate, which is likely squeezing renters on tight budgets.

“January’s single-family rent growth cooled to the lowest level since the spring of 2021,” said Molly Boesel, principal economist at CoreLogic. “While rent growth is slowing at all tracked price tiers, declines for the lowest-cost rentals are not as significant, which raises affordability concerns. Annual rent growth for lower-tier properties was about three times the pre-pandemic rate, while gains in the highest tier were nearly one-and-a-half times during the same period.”

To gain a detailed view of single-family rental prices across different market segments, CoreLogic examines four tiers of rental prices and two property-type tiers. National single-family rent growth across those tiers, and the year-over-year changes, were as follows:

• Lower-priced (75% or less than the regional median): 8.5%, down from 12.1% in January 2022
• Lower-middle priced (75% to 100% of the regional median): 6.5%, down from 13.3% in January 2022
• Higher-middle priced (100% to 125% of the regional median): 5.5%, down from 13.5% in January 2022
• Higher-priced (125% or more than the regional median): 4.3%, down from 12.4% in January 2022
• Attached versus detached: Attached single-family rental prices grew by 6.2% year over year in January, compared with the 4.7% increase for detached rentals

Of the 20 metro areas shown in Table 1, Orlando, Florida posted the highest year-over-year increase in single-family rents in January 2023, at 8.9%. Charlotte, North Carolina recorded the second-highest gain at 8%, while New York and Boston ranked third, both at 7.4%. Phoenix saw the lowest annual rent price gain at 0.6%.

Methodology

The single-family rental market accounts for half of the rental housing stock, yet unlike the multifamily market, which has many different sources of rent data, there are minimal quality adjusted single-family rent transaction data. The CoreLogic Single-Family Rent Index (SFRI) serves to fill that void by applying a repeat pairing methodology to single-family rental listing data in the Multiple Listing Service. CoreLogic constructed the SFRI for close to 100 metropolitan areas — including 47 metros with four value tiers — and a national composite index. The indices are fully revised with each release to signal turning points sooner.

The CoreLogic Single-Family Rent Index analyzes data across four price tiers: Lower-priced, which represent rentals with prices 75% or below the regional median; lower-middle, 75% to 100% of the regional median; higher-middle, 100%-125% of the regional median; and higher-priced, 125% or more above the regional median.

Median rent price data is produced monthly by CoreLogic RentalTrends. RentalTrends is built on a database of more than 11 million rental properties (over 75% of all U.S. individual owned rental properties) and covers all 50 states and 17,500 ZIP codes.

To learn more about the data behind this article and what CoreLogic has to offer, visit https://www.corelogic.com/.