Flat to Modest Rent Growth is Expected for 2023

Jan 31, 2023 | Macro Insights, No Bull Economics

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It appears that more Americans are moving back in with family or roommates (or delaying striking out on their own) after a prolonged period of skyrocketing rent growth aggravated by broad-based inflation, according to ApartmentList.com. Now rents are falling fast.

Key Points

While the national median apartment rent increased +3.8% y/y during 2022 (after a huge +17.6% increase in 2021) according to Apartment List, trends began to weaken towards the end of the year.

Notably, the sequential declines in October – December 2022 represent the largest monthly declines since this data began to be tracked in 2017. 

Change in Rent Graph
Change in Rent Graph

2021’s +17.6% y/y increase in the average rental price reflected a surge in demand after people began to return to normalcy after moving in with family members during covid lockdowns, pushing the vacancy rate from 7%+ when the initial consolidation began down to 4.1%.

Apartment Vacancy Graph
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