U.S. single-family rent growth continued to decelerate at the start of the year, with national rent prices rising just 1.3% annually in January, according to data released Thursday by Cotality.

The property data analytics firm found that 74% of metros experienced softening rent growth in January, up from 68% in December. Furthermore, 38% of metros saw outright year-over-year declines in the price of rent, a notable jump from the 26% recorded the month prior.

This trend matches broader market data on rental markets beyond single-family units, which have also revealed softening rental costs.

However, even with the widespread rent cooling, renters are still feeling the financial squeeze of the past few years of price hikes, according to Cotality.

“Single-family rent growth continued to cool in January, rising just 1.3% year over year — half the pace recorded a year earlier and well below the long‑term average of 3.4%,” commented Molly Boesel, senior principal economist at Cotality, in the report. “Yet even with this moderation, affordability pressures remain elevated. Since 2020, rents have increased 32%, adding roughly $600 per month.”

The report highlights a regional divide in the current rental market, heavily influenced by pandemic-era migration patterns. Midwestern and Northeastern metros are currently leading the nation in rent gains. Chicago and Philadelphia posted the strongest annual increases among major metros at 4.6% and 3.5%, respectively. New York (3.4%) and Detroit (3.3%) followed closely behind.

In contrast, several major Sun Belt markets, which saw massive rent surges in 2021 and 2022, are seeing price corrections to lower rent costs. Florida accounted for roughly 40% of the metropolitan areas experiencing annual rent drops. Miami logged the most significant drop among major metros with a 1.3% decline, followed by Dallas at 1% and Houston at 0.2%. 

However, the localized rent declines offer little relief when viewed through a wider lens. In Miami, for instance, cumulative rent increases have pushed single-family rents up 51% since the end of 2019, saddling renters with an extra $900 a month in housing costs even after recent price softening.

The data also revealed a divergence based on property price tiers. Rents for high-priced properties grew at a faster pace, increasing 2.4% year over year in January.