by Calculated Risk on 9/28/2023 02:45:00 PM

Today, in the Calculated Risk Real Estate Newsletter: Asking Rents Down 1.2% Year-over-year

A brief excerpt:

Tracking rents is important for understanding the dynamics of the housing market. For example, the sharp increase in rents helped me deduce that there was a surge in household formation in 2021 (See from September 2021: Household Formation Drives Housing Demand).

The surge in household formation has been confirmed (mostly due to work-from-home), and this led to the supposition that household formation would slow sharply in 2023 (mostly confirmed) and that asking rents might decrease in 2023 on a year-over-year basis (now negative year-over-year).

Recent data suggests household formation has slowed sharply and asking rents are declining year-over-year.
...
Here is a graph of the year-over-year (YoY) change for these measures since January 2015. Most of these measures are through August 2023, except CoreLogic is through July and Apartment List is through September 2023.
...
With slow household formation, more supply coming on the market and a rising vacancy rate, rents will be under pressure all year. See: Forecast: Multifamily Starts will Decline Sharply

There is much more in the article. You can subscribe at https://calculatedrisk.substack.com/