While rent growth cooled during 2022, it’s still slightly above what was seen prior to the pandemic. This is one trend reviewed by Apartment List in its 2022 Rental Rewind. The analysis tracked three national trends, three regional trends and three outlooks for 2023.
Rent growth, as of November 2022, increased 4.7% year to date. Rents jumped 17.6% in 2021, while rent growth was at 2.4% in 2019 and 3.5% in 2018. Other national trends were focused on vacancy and household formations. An increase in supply saw an uptick in vacancy in 2022. “These increases in supply are attributable to slowing household formation, combined with more new apartment inventory hitting the market as multifamily construction pipelines have begun to recover from pandemic-related disruptions,” according to the report.
Regionally, the Midwest saw large rent growth, taking over the increases seen in the Sun Belt during 2021. Sun Belt cities such as Phoenix and Las Vegas, which witnessed rent growth at more than 25% in 2021, had rents decline in 2022. Meanwhile, Midwest markets like Cincinnati and Indianapolis had rent growth over the 2022 national average—well ahead of some Sun Belt cities. The move to the suburbs continued as well in 2022. “In other words, the further you move from the urban core, the faster the rent growth,” according to the report.
Looking forward, Apartment List reviewed the remote-work environment and its effects on renting. “In a recent survey, 44 percent of workers with full or hybrid remote flexibility told us that they’re planning to move in the upcoming year, compared to just 28 percent of on-site workers.”