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Wednesday, March 29, 2023

Year-over-year Rent Growth Continues to Decelerate

by Calculated Risk on 3/29/2023 10:19:00 AM

Today, in the Calculated Risk Real Estate Newsletter: Year-over-year Rent Growth Continues to Decelerate

A brief excerpt:

Here is a graph of the year-over-year (YoY) change for these measures since January 2015. Most of these measures are through February 2023, except CoreLogic is through January and Apartment List is through March 2023.

Note that new lease measures (Zillow, Apartment List) dipped early in the pandemic, whereas the BLS measures were steady. Then new leases took off, and the BLS measures are now increasing.

Case-Shiller House Prices IndicesThe CoreLogic measure is up 5.7% YoY in January, down from 6.4% in December, and down from a peak of 13.9% in April 2022.

The Zillow measure is up 6.3% YoY in February, down from 6.9% YoY in January, and down from a peak of 17.0% YoY in February />
The ApartmentList measure is up 2.6% YoY as of March, down from 3.0% in February, and down from a peak of 18.0% YoY November 2021.
My suspicion is year-over-year rent increases will slow further over the coming months with slow household formation, and as more supply comes on the market. It is possible that we will see a year-over-year decline in rents sometime this year. As ApartmentList analysts noted: “2023 could be the first time since the early stages of the pandemic that we see property owners competing for renters”.
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