Freddie Mac’s annual Multifamily Outlook report foresees rent rising by
3.6% across the US in 2022. “Given the robust demand for housing this year, we
believe that upward price pressure for both rental and for-sale housing will
continue in the short term as we continue to experience an overall housing
shortage across all housing types,” the report noted. Furthermore, as CPI data
is lagged, the sharp increase in rent prices has not fully factored in
inflation. “We believe the sharp increase in housing costs captured by the CPI
over the past two months is likely just the beginning.”
The report stated that consumers
believe inflation will decline over the next five years, but expectations for
2022 have increased by 50 bps to 3%. For the 12 months ending in October 2021,
rents increased 14.9% on average. The report noted additional contributing
factors for rising demand:
Renters who would have moved last
year who did not due to the pandemic
Two years’ worth of college
graduates who are leaving home for the first time
Professionally managed units (which
this data is derived from) were more able to adapt to changing conditions
brought on by the pandemic than smaller operators and therefore more likely to
capture the demand than smaller operators
A reallocation of budget toward
housing from government stimulus or cutting other expenses during the pandemic
Former roommates choosing to live
on their own
High-density areas that already
experienced a pandemic exodus are expected to have the lowest growth rates.
Rent is expected to drastically rise above the national average in the
following cities:
Phoenix: 7.6%
Las Vegas: 7.0%
Tampa, Fla.: 6.9%
Tuscon, Ariz.: 6.5%
Albuquerque, N.M.: 6.2%
Atlanta: 5.9%
Sacramento, Calif.: 5.8%
Riverside, Calif.: 5.7%
West Palm Beach, Fla.: 5.5%
Fort Lauderdale, Fla.: 5.2%
