Michigan rents jumped 8% this year. How will they change in 2023?

Rent prices took off this year.

Michigan’s rent climbed more than 8% from November to November making the median price $1,321 a month.

But recent data from Rent.com shows this growth is starting to slow as the year ends.

Prices nationally dipped in September and October after months of rapid increases. And an uptick in November indicates to Jon Leckie, researcher for Rent.com, that the high costs are impacting people’s decisions and creating a higher demand for multi-bedroom apartments.

“This is a way to cope with higher rents,” he said. “People are coupled up into roommate situations, and that’s going to increase the demand for luxury apartments because you need two or three bedrooms to do that.”

Related: Rents inch down across the country. See how Michigan compares.

National rent trends show the year over year increase of 7.45% is the lowest since August 2021.

And Leckie expects this slowdown to continue into 2023 despite the “blip” of rising prices in November.

“We expect this general trend of cooling to continue through the winter seasonally and then kicking back up again in the summer,” he said.

Rents skyrocketed during the past two years as the number of new households increased and rental vacancies decreased. This created what some in Michigan described as a cutthroat market where yearly rent increases neared 20%.

But rental supply is starting to improve.

U.S. Census Bureau data shows vacancies are ticking back up and new apartment construction is at a 50-year high with 420,000 new units hitting the market this year, according to RentCafe.

“I think we’re going to continue to see these significant yearly increases until probably the middle of summer 2023 because that’s when the prices will start to moderate,” Leckie said.

Related: ‘It’s a nightmare’: Stories from Michigan’s cutthroat rental market

This could bring relief to Michigan’s 1.1 million renters – especially those looking to move.

But Leckie warns that slowing growth doesn’t mean rents are getting cheaper. Rather it means costs aren’t rising as quickly. Rents across the country are still nearly 25% more expensive than before the pandemic.

“We’ve reached a new floor,” Leckie said. “We’ve elevated the prices.”

The outlook overall, however, seems to be improving for 2023.

Yearly jumps have been trending downward since May. And Leckie says seasonal dips in the winter and spikes in the summer will likely return.

“We’ll start to get back to normal yearly increases that we saw before the pandemic but don’t expect rent levels to go pre-pandemic rent,” Leckie said.

Want to read more about the economy? See all our inflation coverage here.

This story is part of MLive’s Wallet Watch series focused on today’s economic issues. Have a Wallet Watch suggestion? Email us at askaquestion@mlive.com.

More on MLive:

Warehouses, hotels, offices: Empty buildings become housing in Michigan

Homelessness in Michigan fell during the pandemic. Here’s why.

Michigan’s housing market is in crisis. Climate change could make it worse.

If you purchase a product or register for an account through one of the links on our site, we may receive compensation.