A new analysis from Moody's Analytics Reis that was published in the Scotsman Guide has found that inflation is affecting different metros across the US differently – and predicts the sharp increase in the rent-to-income ratio in many cities is likely to cool in the future.
Both demand and rent prices for multifamily units declined sharply during the initial few quarters of the pandemic, particularly in central business districts, but the trajectory changed course in 2021 in what Moody's economist Lu Chen calls a "robust recovery." Moody's data shows that last year, national asking-rent growth outpaced inflation at an annualized rate of 11.9%.
The national rent-to-income ratio also increased by 270 basis points last year, according to Moody's, and edged up from 27.5% in 2019 to 30% in 2021. By comparison, average annual growth for the RTI in the five years prior to the COVID-19 pandemic clocked in at just 26 basis points.
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