Today, in the Calculated Risk Real Estate Newsletter: Asking Rents Down 1.2% Year-over-year
A brief excerpt: 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).
The surge in household formation has been confirmed (mostly due to work-from-home), and this also led to the supposition that household formation would slow sharply in 2023 (mostly confirmed) and that asking rents might decrease in 2023 on a year-over-year basis (now flat year-over-year).
Here is a graph of the year-over-year (YoY) change for these measures since January 2015. Most of these measures are through July 2023, except CoreLogic is through June and Apartment List is through August 2023.
The CoreLogic measure is up 3.3% YoY in June, down from 3.4% in May, and down from a peak of 13.9% in April 2022.
The Zillow measure is up 3.6% YoY in July, down from 4.1% YoY in June, and down from a peak of 16.2% YoY in March 2022.
The ApartmentList measure is down 1.2% YoY as of August, down from -0.8% in June, and down from a peak of 18.1% YoY November 2021.
With slow household formation, more supply coming on the market and a rising vacancy rate, rents will be under pressure all year. See: Forecast: Multifamily Starts will Decline SharplyThere is much more in the article. You can subscribe at https://calculatedrisk.substack.com/