Based on CoreLogic's latest Single-Family Rent Index (SFRI), which analyses single-family rent price changes nationally and across major metropolitan areas, U.S. rent growth continued to relax year over year in July, falling to 3.1%.
Yet that is still in line with the historic average recorded before 2020. 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.
"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."
"But even with the small annual decreases in rent growth," Boesel continued, "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%."
To gain a detailed view of single-family rental prices across different market segments, CoreLogic examines four tiers of rental prices and two property-type tiers. National single-family rent growth across those 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 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 shown in tracked, St. Louis posted the highest year-over-year increase in single-family rents in July 2023, 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.
