January, typically a “tepid” month for rent growth, experienced solid gains to kick off 2022. The average U.S. asking rent increased $8 to a record-high $1,604, reported Yardi Matrix. Year-over-year rent growth increased to 13.9% last month, but that growth range is expected to decline as monthly increases decelerate compared with the numbers in 2021.
“An $8 monthly increase pales in light of the $22 average monthly gains between March and October 2021, but January’s strong seasonal performance is a sign that the sector’s fundamental drivers have not been exhausted,” said Yardi Matrix.
In six of the top 31 metros, asking rent growth increased year over year by 20% or more, with Tampa, Florida, and Phoenix at the top of the list, followed by Florida markets Orlando and Miami, Texas’ Austin, and Las Vegas. In addition, rates were up by 10% or more in almost 90% of the top 31 metros.
On a month-to-month basis, U.S. asking rents increased 0.5% in January, a 40-basis-point increase from the previous month. However, according to Yardi Matrix, the monthly figures were inconsistent. The gains were led by San Jose, California, which along with San Francisco are the only markets in which rents are still below pre-pandemic levels. Previous rent growth leaders Phoenix and Las Vegas came in at -0.1% last month, but Yardi Matrix cautions that “while it’s too early to say those metros are cooling, growth can’t stay at current levels forever.”
On the single-family rental side, asking rent growth inched down slightly month over month. However, it grew by 13.5% year over year through January. Tampa and Miami led year-over-year rent growth, increasing more than 30%, followed by Atlanta and Phoenix.
“Demand remains strong, driven by households that want more space and amenities such as yards for pets and small children to play,” stated Yardi Matrix.
