Above trend rent growth continues in July

The latest rent report from Apartment List shows that the national average rent growth in July was 1.1 percent month-over-month and 12.4 percent year-over-year. Both of these rates are down from those posted last month.

The pattern of rent growth

The first chart shows the history of the changes in the national average rent level since 2017. It is plotted year-by-year so that the annual change pattern is visible. The chart shows that the national average rent continued strong growth in 2022 through July.

The next chart shows the relative rent change by month for each year in the Apartment List data set, with the level of rent set to 100 in January of each year. This shows the consistent pattern of rent growth established in the years 2017-2019 and how the annual rent change trend has deviated from that pattern since then. Through July, rents were up an average of 4.2 percent in 2017 through 2019, while in 2020 rents fell a half of a percent in the first 7 months of the year. In 2021, rents rose a strong 11.9 percent through July, while in 2022 rents rose a more modest 6.7 percent.

The history of rent changes for the last 4+ years is shown in the first chart, below, along with a projection of where rents would be if the pattern of growth that existed before the pandemic had continued. By this estimate, rents are now about $163 per month (13 percent) above where they would have been if they had followed the prior trend. Both the dollar amount and the percentage over trend are up from last month’s levels.

Apartment List’s vacancy rate data was used to create the next chart, below. This chart plots the actual vacancy history since January 2018 along with a projection of how the vacancy rate history would have unfolded after February 2020 if it had followed the pre-pandemic pattern. The chart shows that the national average vacancy has recently been moving in the direction of the long-term trend. However, while the long-term trend line would predict a national average vacancy rate of 6.2 percent, the actual vacancy rate was only 5.0 percent.

The final chart shows the year-over-year rate of rent growth since January 2018 plotted along with the national average apartment vacancy rate. It shows how the two metrics moved in opposite directions after March 2020.

Leaders and trailers

Apartment List provides the underlying data they collected in compiling their report and that data was used to create the tables, below. The tables look at the 52 metropolitan statistical areas defined by the US Census Bureau with populations over 1 million and identify the top and bottom 10 metros for year-over-year rent growth. The tables provide the average monthly rent in the metro, the metro’s vacancy rate, the annual percentage change in rent (YoY Metro) along with the percentage change from the prior month’s rent level (MoM Metro). They also list the percentage change in rent for the metro area compared to the rent level in February 2020, right before the pandemic struck (Feb 20).

The first table shows the 10 metros with the largest annual rent percentage increases. None of these metros saw its rent fall month-over-month in July.

The next table shows the 10 metros with the smallest annual rent increases. Only Minneapolis saw its rent fall month-over-month in July.

All of the 52 metros with populations over 1 million now have average rent levels that are above those of February 2020.

The complete Apartment List report covers many more metros. It also provides readers with the opportunity to download their data sets. It can be found here.