Rent prices are stagnating, suggesting high inflation may stick around
What are the primary reasons cited for the surge in rental costs during the pandemic?
The primary reasons cited for the surge in rental costs during the pandemic include high demand as steep prices and mortgage rates locked many would-be homebuyers out of the housing market, low inventory, and a pandemic-induced demand for more space. Additionally, the rental market was affected by the COVID-19 pandemic and the economic impacts that disproportionately affected Black and Latino households2.
How do the current median asking prices for rent compare to those before the pandemic began in 2019?
The current median asking prices for rent are still higher than before the pandemic began in 2019. According to a report published by Realtor.com, the median rent was $1,732 in May 2023, which is $306 higher than the same time in 2019.
How have single-family home rents changed in 2022, and what could be driving these changes?
Single-family home rents saw a significant increase in 2022, with prices up by 14% year over year, according to CoreLogic Single-Family Rent Index (SFRI). Several factors could be driving these changes:
- High demand: Steep housing prices and rising mortgage rates have locked many potential homebuyers out of the housing market, leading to increased demand for rental properties.
- Low inventory: A shortage of available rental properties has also contributed to the increase in rent prices.
- Pandemic-induced demand for more space: The COVID-19 pandemic led to a higher demand for larger living spaces, including single-family homes, as people spent more time at home.
These factors combined have put upward pressure on single-family home rent prices in 2022. However, there are signs that rental prices may be easing in certain parts of the country, with the largest rent decreases seen in the South and West regions.