The next 90 days will tell us how high US rents will get in 2023
The cost of renting a house is still increasing, but at a much slower pace than last year. This could mean that rents might not increase as much in the next few months.
Like the overall inflation rate in the US, housing rental prices continue to increase, but at a slower pace than one year ago. What will this mean for rents over the next few months? The economists are about to have their most intimate look ever.
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Jay Lybik is national director of Multifamily Analytics at CoStar Group. A real estate analytics company. It's really going to set the tone for rest of the year."
CoStar underestimated demand in the second quarter of last year. Lybik stated that while Americans experienced record rent increases over the summer, month-over-month numbers of inflation began to slow down by the end the quarter.
He said that rents were still rising, but at a slower rate. Rents are still rising, but they're doing so at a slower rate.
Rental supply currently exceeds demand. Apartments.com recorded a decrease in the annual rent inflation rate, which was 10.9% when it peaked in 2022 and 2.6% by the end of first quarter.
CoStar estimates that rent inflation will reach 1.6% by 2023, but this will depend largely on what economists analyze in the coming months.
CoStar reported that the disparity in supply and demand caused the apartment vacancy rates to rise from a low record of 4.7% during the third quarter 2021, to a current rate of 6.7%. CoStar expects the US to end the year at 7%, which is about one percentage point more than the average before the pandemic.
It is because it took several years for many housing projects to be completed that were started in 2020 or 2021. CoStar estimates that out of the millions of apartments currently under construction, 531,000 will be ready by 2023 and 476 000 by 2024.