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Lawler: Are US Rents Falling?

by Calculated Risk on 11/15/2022 09:42:00 AM

Today, in the Calculated Risk Real Estate Newsletter: Lawler: Are US Rents Falling?

A brief excerpt:

After increasing at a pace unseen in US history from the Spring of 2021 to the middle of 2022, it appears as if US rent growth has slowed sharply over the past few months. Indeed, the most “high frequency” data (meaning most timely) suggest that US rents may have stopped increasing this Fall, and may actually have begun to decline.

Below is a table showing the monthly % changes in these rent indexes NOT adjusted for seasonal fluctuations.

CR Note: The CoreLogic index was negative in September (released this morning).

Note that the Apartment List Index, which is not smoothed, has shown two consecutive monthly declines, while the Zillow Index, which IS smoothed, fell for the [first] time in over two years last month. Note also that the CoreLogic Index, available only through August and which is smoothed, decelerated sharply during “August.”

The above table can be a bit misleading, however, because all three rent indexes display relatively modest but statistically significant seasonal fluctuations …

While none of these rent indexes is perfect, the latest data suggest that US rent growth has slowed sharply in recent months, and at best has been growing in the low single digits and quite possibly may have actually turned slightly negative last month. If so, that is certainly no surprise, and as I said in an earlier report, I expect that US rents in 2023 will be lower than rents during this Summer and Fall.

There is much more in the article. You can subscribe at https://calculatedrisk.substack.com/

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