Rents Are Still Rising—but Not By Much. Are the Steep Hikes Finally Over?

The rent may still be too damn high, but at least it isn’t skyrocketing anymore.

That’s the message from the Realtor.com® monthly rental report, which shows a welcome cooling-off after the craziness of the COVID-19 pandemic period.

Rental prices in the largest metropolitan areas across the country rose 11.6% for the full year in 2022 but downshifted steadily throughout the year. By December, prices were only 3.2% higher, compared with the same month a year earlier.

Nationally, the median monthly rent was $1,712 in December—down $69 from the peak in July.

However, the national numbers mask enormous differences in metros around the country, where the locations people are moving to and from are reversing. And instead of embarking on costly, cross-country moves or striking out on their own, many renters are staying put.

“Inflation is high, living costs are high,” says Realtor.com economist Jiayi Xu. “Instead of people looking for a new place, they may be staying where they are or maybe moving in with their families. The formation of [new] renter households is decreasing.”

Notably, some of the hottest metro areas during the pandemic are now experiencing annual price drops. Take Tampa, FL, for example. Rents were down 4.3% year over year in December in the Florida metro. Prices also slipped 4.5% in the Las Vegas metro area.

Slower price gains and even declines are a welcome change, Xu notes. But she points out that prices in many pandemic hot spots are still elevated, raising affordability concerns. The median monthly rental price in Tampa—for homes of all sizes—was $1,760 in December, for example. In Miami, it was $2,682.

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Even as the Sun Belt cools, some of the big cities that people fled in the early days of 2020 are heating back up. In December, rental prices were up 12.2% in the New York City metro and a whopping 17.5% in metro Chicago.

The biggest rent growth in 2022 was seen among studio apartments, the report found—a reversal of the 2021 trend in which larger units commanded the biggest increases, as folks were stuck inside and clamoring for more space. Studios are much more common in bigger cities like New York City, Chicago, and Boston, where people are now flocking.

Rich Harty, who co-owns Harty Realty Group in Chicago, isn’t surprised that Windy City prices are through the roof.

“There’s so little inventory, and people have nowhere to go,” Harty says.

Chicago has gotten a boost in recent years from some high-profile corporate tenants, including Google and McDonald’s. The latter transferred its headquarters from the suburbs into the trendy West Loop neighborhood in 2018.

Those moves have attracted plenty of professionals to the city, particularly to higher-end rentals. This might be helping to skew some of Chicago’s numbers higher, Harty believes.

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