Single-family rents posted a 3.1% year-over-year gain in July, the 15th consecutive month of deceleration but is still in line with the historic average recorded before 2020, according to a new report from CoreLogic.
CoreLogic’s Single-Family Rent Index for July found that more affordable areas of the country, such as St. Louis and Chicago, appear to be gaining popularity with renters, posting annual growth that outpaces the national average. Meanwhile, some Sun Belt markets that saw high rental gains one year ago are now near the bottom of the list for appreciation.
The report examines four tiers of rental prices to gain a detailed view of single-family rents. The national single-family rent growth across the four tiers, and the year-over-year changes, were as follows:
- Lower-priced (75% or less than the regional median): up 4.6%, down from 13.8% in July 2022
- Lower-middle priced (75% to 100% of the regional median): up 3.7%, down from 13.6% in July 2022
- Higher-middle priced (100% to 125% of the regional median): up 2.9%, down from 13.3% in July 2022
- Higher-priced (125% or more than the regional median): up 2.3%, down from 11.1% in July 2022
- Attached versus detached: Attached single-family rental prices grew by 3.8% year over year in July, compared with the 2.4% increase for detached rentals
Of the 20 metros the report tracks, St. Louis posted the highest year-over-year increase at 7.3%. Chicago registered the second-highest annual gain at 6.3%, followed by Boston and San Diego (both 5.7%). Las Vegas (-1%), Miami (-0.6%) and Austin, Texas (-0.5%) saw slight year-over-year rental cost decreases.
“While U.S. single-family rent growth has now reverted to its long-term average of about 3%, three U.S. metros recorded annual cost decreases in July,” said Molly Boesel, principal economist for CoreLogic. “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.”
Boesel continued, “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. For example, Miami recorded a 0.6% decline in annual rent growth in July 2023, but the gain since July 2020 has registered 55%.”
For the full report, click here.