January 10, 2023 |
Updated January 10, 2023
Potentially more to seasonal rent growth slowdown.
Rents have fallen for four straight months. The Apartment List National Rent Report slipped 0.8% during December. This puts national median rent growth a 3.8% for 2022, well shy of the 17.6% increase witnessed in 2021. This also places 2022 rent growth on par with years prior to the pandemic.
“The timing of this cooldown in the rental market is consistent with the typical seasonal trend, but its magnitude has been notably sharper than what we’ve seen in the past,” according to the report. “This suggests that the recent swing to falling rents is reflective of a broader shift in market conditions beyond seasonality alone.”
In 2018, rent growth was at 3.5%, while rents increased 2.4% during 2019. Rents declined 1.5% in 2020.
While some Sun Belt and Southeastern U.S. markets still top the list of locations with the highest rent growth since March 2020, those warmer areas have been replaced with Midwestern metros. During the past six months Indianapolis and St. Louis saw the fastest rent growth at 1%. Several other metros that include Cincinnati, Kansas City and Columbus, Ohio, were tied with no rent growth change. During the past 12 months, Indianapolis, Louisville, Ky., and Kansas City each had rent growth at 7%.
Those with the slowest rent growth during the past six months include Providence, R.I., New Orleans and Seattle each at a 6% decline. Sun Belt metros such as Las Vegas, Phoenix and Atlanta were among the slowest markets during the past 12 months. San Francisco (-5%) and San Jose, Calif. (-1%), were the only markets with negative rent growth since March 2020.