Please consider the Apartment List National Rent Report for February 2022, emphasis mine.
After a slight dip to close out 2021, our national index ticked back up by 0.2 percent over the course of January. Even though month-over-month growth has moved back into positive territory, rent growth has still cooled substantially from last year’s peak. Year-over-year rent growth currently stands at a record-setting 17.8 percent, but over the past four months, rents have increased by a total of just 0.9 percent. Much of this cooldown is likely related to seasonal factors; it remains to be seen if rapid rent growth will return as moving activity picks back up in the spring and summer.
41 of the nation’s 100 largest cities saw rents fall this month, and just five cities saw prices increase by more than one percent. In contrast, from last March through September, all 100 of these cities saw rents grow virtually uninterrupted, and some cities were experiencing month-over-month growth topping five percent. Consistent with this environment of cooling rent growth, our national vacancy index is also continuing to gradually tick up, indicating that the tight market conditions that characterized 2021 are easing, albeit slowly.
Over the past 12 months, rent prices spiked by an unprecedented 17.8 percent nationally. The early stages of the pandemic led to a modest decline in rents from January 2020 through January 2021 (-1.4%), but the staggering growth of 2021 more than made up for the lost ground. In fact, the national median rent ($1,312) is now $120 greater than where we project it would have been if rent growth since the start of the pandemic had been in line with the average growth rates we saw in 2018 and 2019. Rent growth over the past year has far outpaced that of any prior year in our estimates, which go back to 2017. For comparison, year-over-year rent growth in January averaged just 2.3 percent in the three years preceding the pandemic.
Monthly Change in National Rent Index
From last March through September, the national median rent grew by an average of 2.1 percent per month – nearly the same amount that they increased over the entire year of 2019. However, over the most recent four months, monthly growth has averaged just 0.2 percent, with a total increase of less than one percent over that period. In December, rents actually fell by 0.2 percent, the only time they did so in 2021. That price dip proved to be short lived, but this month’s increase was still a modest one.
It’s worth noting that a slowdown in rent growth during the fall and winter months is expected due to seasonality in the market. In fact, in the years preceding the pandemic, it was typical to see rents actually fall slightly at this time of year. In other words, even though rent growth has been essentially flat over the past three months, it’s still pacing a bit ahead of the pre-pandemic trend.
Cities with Fastest and Slowest Rent Growth
What the BLS Says
Owners’ Equivalent Rent is the mythical price one would allegedly pay to rent one’s own house from oneself, unfurnished and without utilities.
Rent of primary residence is more like apartment rent and thus a better comparison.
BLS data only runs through December. but the National Rent Index did not change much in the last three months as noted above.
The National Rent Index is up about 17.8% over the past year while the BLS says 3.3%.
Unless you live in Detroit or on Mars, you may have a few doubts about that BLS data.
Mortgage Rates Are at the Highest Level Since Before Covid-19 Hit
In related housing news, please note Mortgage Rates Are at the Highest Level Since Before Covid-19 Hit
Also consider Real Disposable Personal Income Has Fallen 8 Out of the Last 9 Months
Inflation has eaten up every penny of income gains for the last year, and then some even if you believe the BLS.
This post originated at MishTalk.Com.
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Mish
The real pain starts soon, as the HOPE program ended last month.
Massive culture shock incoming…
That is unarguable. What is arguable is who got the rent help:
Most of the rent help went to households where government assistance was normalized as a lifestyle choice, the low income. Nearly all low income people (my clients) got some kind of help, regardless of need. So I will revise my statement to state “nearly all low income people got help.”
There is no human misery at the bottom of the income ladder. Everything is free. That was the point I was arguing against.