Metro-level Rents Closely Track Listing Prices, with ExceptionsĪs we would expect, rent and for-sale listing prices are closely correlated. Table 1: National Rents by Unit Size Unit Sizeįigure 2: National Rent by Unit Size Trend However, as we see rent growth in general slowing down this month, studio rents had the largest month-over-month decrease in growth from April into May, possibly hinting at a broader leveling-off of median national rent. Studio renters are generally more able to move in and out quickly and to search for better prices than renters of larger units who are more likely to be in longer leases and have families that prefer to stay in place. Studio units experience more volatility in their median rent because their demand is more elastic than larger units. This interesting reversal will be even more pronounced later through the rest of the year, since studio rents were actually falling through the second half of 2020 in the midst of the pandemic-induced flight from major cities. The surge in studio rents is a more recent development, as the 2-year growth remains slower than larger units because studio rents were trailing the rental market at large from May 2019 into May 2020. In each month of 2022 thus far, 0-bedroom units (studio apartments) have had higher year-over-year growth than 1- or 2-bedroom units and rentals in general. Studio Units Continue to Drive Rent Growth and Rent Growth Slowdown Further aiding this recovery is the current increase in for-sale listing inventory, which could help some renters become first-time homebuyers and take some pressure off of rental demand. If year-over-year rent growth continues to cool down, rent can level off–as it often does in the fall–and continued earnings increases can inch renters’ financial situations back closer to their pre-pandemic states. If rents continue to grow at May’s annual pace, we’ll see $2,000 rent by October, but if yearly growth continues to slow as it did between April and May, renters may not have to contend with $2,000 rent until next year. This month’s data, which shows a more notable deceleration than we saw in rents earlier this year, suggests that milestone could be further off. Last month we found that if rent growth remained near 17%, nationwide median rent would surpass $2,000 this summer. However, there may be a slight reprieve coming from the rapid pace of rent growth that characterized the fourth quarter of 2021 and first quarter of 2022. Renters are paying more for housing, more for goods and services, and their paychecks are simply not keeping up. Average earnings for the first quarter of 2022 grew by just 5.2% from the previous year, so the cost of housing outpaced earnings almost three times over, just as the general cost of living as measured by the Consumer Price Index grew by 8.6% in May. May 2022 saw the slowest annual growth rate for rents since September 2021, and the annual growth rate has slowed each month of this calendar year after peaking at 17.3% in January. Though these numbers are staggering, they actually mark a slowdown in year-over-year growth compared with the past few months.

May’s median rent constitutes a 15.5% increase over May 2021, a 23.2% increase over May 2020, and a 26.6% increase over May 2019. This is the highest level in ® rental data history, and the 15th consecutive month of a new record rent. The median rent for 0- to 2-bedroom rental homes across the 50 largest metropolitan areas in the United States reached $1,849 in May. Nationwide Rents Spike, but Slow From Record Pace Metros with higher rental vacancy rates are generally among the least expensive metros to rent a home in.In some metropolitan areas with healthy local economies, renting a home is relatively more appealing than buying one, compared to other metros.Studio unit rent growth, after trailing larger unit rent growth until January of this year, continues to lead the charge in increasing prices at the national level.Year-over-year rent growth has decreased every month in 2022, and is at its lowest level since September 2021.Median rent in the top 50 metros reached $1,849–15.5% higher than at this time last year and a new rent record for the 15th month in a row.

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