A ‘For Rent’ sign is posted near the house on February 7, 2022 in Houston, Texas.
Brandon Bells | beautiful pictures
Single-family rents in July were 12.6% higher than in the first month of the year, but the increase continues to fall from April’s record high, according to a new report from CoreLogic.
Most major metropolitan areas are cooling off equally, even in the Belt of the Sun, which saw the highest rent increases in the first years of the pandemic.
Miami continued to see the biggest gains, with rents up nearly 31% year over year, but actually down from 41% growth in March. Phoenix’s rents rose 12.2% in July, but down from an 18% increase in March.
Rising rents in warmer places are in large part due to the displacement of remote workers during the pandemic. They also choose single-family homes over condominiums because they want more space. That demand drives rent increases and weighs heavily on affordability. With inflation now more ingrained in consumers’ wallets, demand for these high-priced rental properties is waning and landlords are losing their pricing power.
Molly Boesel, chief economist at CoreLogic, said: “July marked the third month of year of slower growth in single-family rents. However, higher interest rates this year increase monthly mortgage payments on new loans, and potential homebuyers may choose to continue renting over buying, helping to keep prices up. in control.”
Rent growth has picked up slightly in some of the major Northeast markets, such as Philadelphia, New York City, and Washington, DC. The return to work of government employees in DC and technology and finance workers in New York is driving some of that.
While Miami and Atlanta are seeing the biggest rent increases, St. Louis and Honolulu had the smallest increase. However, vacancy rates continue to be extremely low across most major markets, as demand outstrips supply.