Single-Family Rent Growth Projected to Slow Throughout 2023

For the first time ever, in Q4, there were more “units built-for-rent” (BTR) started than “units built-for-sale” started, according to the Calculated Risk blog, based on data from US Census Bureau.

BTR production was up 15% in Q4 2022 compared to Q4 2021. Single-family starts were down 34% in Q4 2022 compared to Q4 2021.

CoreLogic Single-Family Rent Index (SFRI) reported that BTR rents continue to rise – by 6.4% year over year in December 2022 – however the growth rate is slipping. It rose by 12.1% in December 2021.

Rental price gains have risen by about an average of $300 over the past two years and have gone up for eight consecutive months on an annual basis.

Orlando, Miami Lead BTR Rent Growers

Orlando (10.8% increase) and Miami (9.9%) again posted the highest U.S. annual rental cost increases, while Phoenix (1.2%) saw the lowest growth.

CoreLogic reported that the job market’s impact on rental price growth has been particularly evident in cities like Miami, which led the country in 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.

Molly Boesel, principal economist at CoreLogic, said in prepared remarks, “the US 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. 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.”

As for existing-home sales, they fell for the 12th straight month in January, according to the National Association of Realtors.

Month-over-month sales were mixed among the four major U.S. regions, as the South and West registered increases, while the East and Midwest experienced declines. All regions recorded year-over-year declines.