RALEIGH – Even as home sale prices have moderated in the Triangle in recent months, the price of renting keeps going up.

Aa new report from real estate brokerage company Redfin released today finds that in Raleigh, rents are growing the fastest of any of the nation’s 50 most populous metropolitan areas.

Redfin says the median asking rent in November was $2,100 for a rental property in the Raleigh region.

That’s up 21.8% from November 2021 when median asking rent was $1,723.  Over a 12-month lease, renters would pay $4,524 in additional rent now compared to leasing the median rental property in November 2021, if they signed at the asking price.

Raleigh’s market is vastly different than many other U.S. metropolitan regions, according to the data.

Rents decline in many markets

“Rent growth is likely to continue cooling,” said Redfin Economics Research Lead Chen Zhao in a statement. “Asking rents are already down annually in 14 of the metros Redfin tracks, and we expect declines to become more common in the new year. That should ultimately help slow inflation further. Slow inflation will lead to lower mortgage rates, which should also bring more homebuyers back to the market.”

The increase far outpaces the national average, 7.4% year-over-year price growth across Redfin’s data set.

It also outpaces the most recent inflation data released this morning by the Bureau of Labor Statistics, which tracked an unadjusted annual inflation rate of 7.1% for shelter as well as a year-over-year growth of 7.1% across all items.

 

Cities where rents increased the most, according to Redfin:

  1. Raleigh, NC (21.8%)
  2. Oklahoma City, OK (17.9%)
  3. Indianapolis, IN (15.8%)
  4. Cleveland, OH (14.9%)
  5. Nashville, TN (14.8%)
  6. Salt Lake City, UT (13.9%)
  7. Pittsburgh, PA (12.4%)
  8. Memphis, TN (10.1%)
  9. Cincinnati, OH; Miami, FL; San Diego, CA (tied at 9.2%)
  10. Columbus, OH (8.4%)

Cities were rents declined the most, according to Redfin:

  1. Milwaukee, WI (-13.1%)
  2. Houston, TX (-6.3%)
  3. Austin, TX (-5.3%)
  4. Baltimore, MD (-4.4%)
  5. Minneapolis, MN (-4.1%)
  6. Chicago, IL (-3.8%)
  7. Denver, CO (-2.9%)
  8. Atlanta, GA (-1.8%)
  9. Dallas, TX (-1.8%)
  10. Jacksonville, FL (-1.8%)

A month ago, the region ranked second among the top 50 most populous metropolitan regions for year-over-year asking rent price growth, at 21%.

Nationally, rent prices are decreasing month-over-month, the Redfin data shows.

Housing pain: Raleigh rents soar at double rate of inflation – 7th highest in US

What’s happening

“The Triangle has seen just massive growth of prices, above and beyond what national trends were,” said Taylor Marr, deputy chief economist at Redfin, in a recent interview with WRAL TechWire about the housing market.

But one recent change in the Triangle, according to Marr, is that some homeowners that would otherwise list a property for sale are instead choosing to convert that property into a long-term rental, and are looking for tenants to lease the property.

So, too, are investors who purchased property in 2021 and the early part of 2022, said Marr.  At one point, Redfin’s data showed that investors were buying about 1 in every 4 homes in the region, though that has slowed in the second half of 2022, noted Marr, and is now about 1 in 5 homes in Raleigh and 1 in 6 homes in Durham.

And people are still moving to the region, and while homes are now more expensive due to mortgage interest rates rising in the second half of 2022, renting may still make more sense than buying, for some.

But entering 2023, it’s possible that rent prices could stabilize, said Marr.  That’s because rental supply will continue to come on the market, due to a decent growth rate among the supply of rental units, including multifamily properties.

“Raleigh is one of the boom towns that has been building a lot of rental supply,” said Marr.  “Which could put downward pressure on rents.”

Report: Price of renting in Raleigh up nearly 24% from last year