Year-Over-Year Rents Are Rising, But at a Slower Pace

Rent growth is picking up steam after a winter slowdown, but prices are rising at a much slower pace than in 2021, the CalculatedRisk Newsletter reports. Year-over-year rent growth is up 16.3%, but nationwide rents have increased by just 2.5% in the first four months of 2022. Despite a lack of population growth throughout the pandemic, household formation picked up significantly, creating a surge in demand for single-family rental homes amid elevated for-sale prices and low housing inventory.

As rising inflation tightens its grip on the post-pandemic housing market, rental prices are expected to reach new highs in 2022, but at a decelerating pace.

The Zillow measure is up 16.8% YoY in February, down from 17.2% YoY in February. And the ApartmentList measure is up 16.4% as of April, down from 17.2% in March. Both the Zillow measure (a repeat rent index), and ApartmentList are showing a sharp increase in rents.

Clearly rents are still increasing, and we should expect this to continue to spill over into measures of inflation in 2022. The Owners’ Equivalent Rent (OER) was up 4.5% YoY in March, from 4.3% YoY in February - and will likely increase further in the coming months.

PB Topical Ref