After reaching a peak annual growth rate of 17.1% in February 2022, rent growth has been steadily cooling nationwide, Zillow reports. Asking rents fell 0.3% in December following a 0.4% drop in November, which was the largest one-month decline in the seven-year history of the Zillow Observed Rent Index, but not all metros are seeing equal price corrections.
Popular rental hubs like Seattle, Las Vegas, and Dallas saw the largest monthly rent drops with declines of -1.0, -0.9%, and -0.8%, respectively. On the other hand, rents are still rising in Sacramento, Providence, and Cleveland, which saw December gains of 2.7%, 0.6%, and 0.5%, respectively.
Rent growth has been cooling since reaching a peak of 17.1% year-over-year growth in February. Americans’ demand for housing has waned this year after booming in 2021, thanks to higher costs of rent and generally high inflation. More people are doubling up with roommates or family, pushing up the rental vacancy rate and thereby putting some pressure on landlords to keep rent hikes in check. This slower pace of rent growth is likely to show up in official measures of rent inflation in early 2023.
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