Single-Family Rent Growth Reverts to Long-Term Average of 3%
Tertiary markets are performing the best at 3.4%.
There are plenty of ways to interpret it, but only one way to read it: Single-family rent growth continues to slide.
U.S. single-family rents posted a 3.1% year-over-year gain in July, the 15th consecutive month of deceleration but in line with pre-pandemic trends, according to a new report from CoreLogic.
St. Louis was tops in the US in year-over-year rent growth in July, at 7.3%. Three metros saw annual rent declines from July 2022: Las Vegas (-1%), Miami (-0.6%) and Austin, Texas (-0.5%), according to its Single-Family Rent Index (SFRI), which analyzes single-family rent price changes nationally and across major metropolitan areas.
The “have-nots” grew better than the haves, with low-end rental gains up by 4.6% on an annual basis in July, compared with 2.3% upside for high-end rentals.
Molly Boesel, principal economist for CoreLogic, said in prepared remarks, “While U.S. single-family rent growth has now reverted to its long-term average of about 3%, [these] three U.S. metros recorded annual cost decreases in July.
“However, because the SFRI peaked in these metros in July 2022, the annual decreases represent a plateauing of costs rather than larger weaknesses in single-family rental markets.” But even with the small annual decreases in rent growth, the gains of the past few years are unlikely to be totally erased in the near future, Boesel said.
For example, Miami recorded a 0.6% decline in annual rent growth in July 2023, but the gain since July 2020 has registered 55%.
Meanwhile, Galen Faurot-Pigeon, Research Analyst, Markerr, tells GlobeSt.com that he measured US single-family YoY rent growth at 2.7% in August 2023, down from 3.3% in July 2023.
Tertiary markets are performing the best at 3.4%, followed by Coastal, Rustbelt, and Sunbelt markets at 2.9%, 2.9%, and 2.6%, respectively.
Sunbelt markets saw the biggest deceleration of 80 bps month over month and are now the geography with the lowest YoY rent growth.
The top three markets for YoY rent growth are Knoxville, Miami, and Syracuse.