Rent Growth Slows for the Third Straight Month

Rent growth seems to be following the same path as home price growth with rents slowing for the third consecutive month according to CoreLogic’s Single-Family Rent Index.

  • U.S. single-family rent growth was up by 12.6% in July when compared to the same time last year, this is down from the 13.4% reported in June and is down from the 14.0% high reported in April.

Poorest see the biggest jump. Unfortunately, the biggest gains seem to be on the lower end of the market with lower-priced units up 13.9% year-over-year compared to 6.3% in July 2021. Meanwhile, higher-priced units were up 11.4% year-over-year which was the lowest annual gain and is only up 1.3% percentage points from one year ago.

  • Lower-middle priced units and higher-priced units were up 13.6% and 13.4%, respectively.

What a year Miami. Miami held on to the top spot despite an almost 5% percentage point drop to 30.6% year-over-year growth in July. This was the 12th month Miami held the top spot.

  • Orlando, Florida recorded the second-highest gain at 22.2%, San Diego and Atlanta tied for third at 14%, and Las Vegas rounded out the top five with 12.0% growth.

Analysis. Molly Boesel, principal economist at CoreLogic, said that rising costs for a mortgage could keep rents elevated for longer. “July marked the third month of slower annual gains in single-family rents. However, higher interest rates this year increased monthly mortgage payments for new loans, and potential homebuyers may choose to continue renting rather than buy, helping keep price increases in check.”

BOTTOM LINE: Rents will slow but if current renters can’t buy because of elevated prices and borrowing costs rents aren’t going to fall as much as some think.