SFR Rent Growth Slows to the Lowest Level in Three Years
Still, they were up 2.6% year over year in September, according to CoreLogic.
Single-family rentals (SFRs) saw the 17th straight month of slowing rent growth in September, bringing it to the lowest rate in three years, according to data from CoreLogic. However, the national average was still an increase of 2.6%, which is only slightly off from the pre-pandemic average.
As always, a national average doesn’t apply evenly to all local markets. “Relatively affordable metro areas continue to gain momentum, with St. Louis again leading the country for year-over-year rental cost hikes,” the company wrote. “Meanwhile, Miami — which led the U.S. for rent increases one year ago at almost 20% — was one of three U.S. markets to see prices decline annually in September.”
Miami is the second most expensive market in the country, with SFR rentals costing more than half the area’s median income.
“While low-tier rental gains are slowing, they have still surpassed those of their higher-priced counterparts since early 2020,” Molly Boesel, principal economist for CoreLogic, said in prepared remarks. “Slowing month-over-month rent growth in September reflects typical seasonal patterns, but indications are that annual gains will remain positive through the rest of 2023.”
The company breaks local markets into four categories:
- Lower-priced (75% or less of the associated regional median) — up 3.6% year over year in September, which is down 12% from September 2022.
- Lower-middle-priced (75% to 100% of the associated regional median) — up 3.1% year over year in September, which is down 11.4% from September 2022.
- Higher-middle-priced (100% to 125% of the associated regional median) — up 2.3% in September, which is down 10.5% from September 2022.
- Higher-priced (125% or more of the associated regional median) — up 1.9% in September, which is down 8.7% from September 2022.
- At the market peak in 2022, year-over-year rent growth ranged from about 13% to 15%, depending on the category.
CoreLogic separately breaks down SFRs into attached (rental prices up 3%) and detached (2%).
While St. Louis saw the highest year-over-year increase in single-family rents in September 2023 at 6.5%, San Diego posted the second-highest annual gain at 6%. Boston came in third at 5.1%. Although specific percentages weren’t’ offered, a CoreLogic graph shows that the fourth highest increase was in Chicago at about 5% and then in New York, where it was below 5%.
Austin (-1.4%), Miami (-0.7%), and Las Vegas (-0.2%) continued to post annual declines.