The U.S. single-family rental market is undergoing notable changes, with CoreLogic's latest data revealing shifting trends across different price tiers. Lower-priced rentals are seeing a significant slowdown in annual growth, in contrast to previous years. Meanwhile, attached single-family rentals are outpacing detached ones, marking a 3.8% year-over-year increase. Among major metros, St. Louis leads with a 7.3% annual rental growth rate, followed by Chicago at 6.3%. However, some cities like Las Vegas, Miami, and Austin are experiencing slight declines in rental costs. This evolving landscape highlights the dynamic nature of the U.S. rental market.
According to the most recent Single-Family Rent Index (SFRI) by CoreLogic, the year-over-year growth in U.S. rental prices eased in July, dropping to 3.1%. Nevertheless, this figure remains consistent with the historical average observed before 2020. Notably, more affordable regions like St. Louis and Chicago are becoming favoured by renters, as they report annual growth rates exceeding the national average. Conversely, certain Sun Belt markets, which experienced substantial rental increases a year ago, now find themselves at the lower end of the appreciation scale.
Molly Boesel, Principal Economist at CoreLogic, noted that while U.S. single-family rent growth has returned to its long-term average of approximately 3%, three U.S. metropolitan areas saw rental costs decline annually in July. However, as these metros reached their peak SFRI levels in July 2022, the annual declines signify a levelling off rather than a weakening of rental rates in larger markets. However, despite the minor annual dips in rent growth, the substantial gains achieved in recent years are not expected to disappear entirely in the immediate future.
For a comprehensive understanding of single-family rental prices in various market segments, CoreLogic assesses four levels of rental prices and two property-type categories. Here are the national single-family rent growth figures across these tiers and their year-over-year changes. Here are the figures for single-family rental price changes across different price tiers: For lower-priced rentals (priced at 75% or less than the regional median) the increase was 4.6%, a decrease from the 13.8% seen in July 2022, lower-middle priced rentals (priced between 75% and 100% of the regional median) saw a 3.7% increase, down from 13.6% in July 2022, higher-middle priced rentals (priced between 100% and 125% of the regional median) experienced a 2.9% increase, down from 13.3% in July 2022, higher-priced rentals (priced at 125% or more than the regional median) had a 2.3% increase, down from 11.1% in July 2022, and attached single-family rental prices grew by 3.8% year over year in July, in contrast to the 2.4% increase for detached rentals.
Among the 20 metros analysed, St. Louis recorded the highest year-over-year increase in single-family rents in July 2023, with a rate of 7.3%. Chicago followed closely with the second-highest annual gain at 6.3%, trailed by Boston and San Diego, both at 5.7%. On the other hand, Las Vegas (-1%), Miami (-0.6%), and Austin, Texas (-0.5%), experienced slight year-over-year decreases in rental costs.
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