Apartment List’s national rent index increased by 0.5% over the course of April, the third straight monthly increase in rent prices, but a slight slowdown from March. Year-over-year rent growth is at its lowest level since March 2021, and more deceleration is likely in the months ahead, Bill McBride reports in The CalculatedRisk Newsletter. While rents are still surging nationwide, they’re slowing, along with a decline in household formation and a sudden increase in rental supply.
Tracking rents is important for understanding the dynamics of the housing market. For example, the sharp increase in rents helped me deduce that there was a surge in household formation in 2021 (See from September 2021: Household Formation Drives Housing Demand). This has been confirmed (mostly due to work-from-home), and also led to the supposition that household formation would slow sharply now (mostly confirmed) and that asking rents might decrease in 2023 on a year-over-year basis.
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